Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

PORT OF FOSDYKE BILL [Lords]

As amended, considered; to he read the Third time.

Oral Answers to Questions — ENVIRONMENT

Land Registers

Mr. Hunter: asked the Secretary of State for the Environment how much land is currently on the land registers held by his Department; and how much has been removed since they were established.

The Minister for Housing, Urban Affairs and Construction (Mr. John Patten): The amount of land on the registers has now fallen below 100,000 acres for the first time to 99,968 acres; 46,000 acres have been removed since the registers were established in mid-1981. My right hon. Friend will continue to use his statutory powers to force sales; and we shall be asking Parliament to streamline the procedures for directing owners to sell. We think that it is better to build, where possible, on brown land that has previously been built on than to build on green land.

Mr. Hunter: I warmly welcome what my hon. Friend has just said. What further measures does he propose to take to ensure that the intolerate pressures for development in counties such as Hampshire and Northamptonshire are relieved? What further measures does he intend to take to convince Left-wing local authorities that housing needs are more important than ideology?

Mr. Patten: Alas, there are some loopholes in the Act. We need to do more and my right hon. Friend's forthcoming local government measure will introduce new ways to make recalcitrant councils, whatever their political colour, "unbelt" land so that it can be built upon.

Mr. Weetch: Does the Minister recall that some years ago the Northfield report recommended setting up a national register of land? Does he think that there are any advantages in that? Does he agree that a national register for the ownership of land would give some sort of reliable statistical basis for a land policy? What does the Minister think of that proposition?

Mr. Patten: I do not remember the Northfield report. However, I do have some views on a land register. We have in the Department a perfectly adequate register of unused land in the ownership of local councils, statutory

undertakers, and nationalised industries. It contains over 99,000 acres of land. That is there for a start and more land could undoubtedly be registered. We need to bring that land back into use as soon as possible.

Mr. Steen: We should congratulate my hon. Friend on releasing 46,000 acres of public land. However, the problem of public vacant land involves not only getting rid of the land on the register, but stopping more land coming on to it. That is the problem that my hon. Friend must face. It will mean that we never see the end of public vacant land. Will my hon. Friend also consider the 1,000 acres that are under the ownership of the Department of the Environment, because that issue needs to be dealt with?

Mr. Patten: Unfortunately, there are no productivity bonuses in my job, so I must make do with my hon. Friend's welcome words of praise, and I thank him for them. I saw my hon. Friend's interesting letter in The Times on this subject earlier this week. He is quite right in saying that we must do all that we possibly can to stop the flow of new land coming on to the register. Although more than 10,000 acres came off the register in 1986, about 7,000 acres went on to it. We should try to prevent that, although it is part and parcel of the identification of vacant land. We have a duty to move Government land holdings that are not in use, and a policy to move it all by 1 April 1988, if possible.

Water Authorities

Mrs. Golding: asked the Secretary of State for the Environment if he will be meeting the Council for the Protection of Rural England to discuss the proposed privatisation of water authorities.

The Secretary of State for the Environment (Mr. Nicholas Ridley): Ministers are in regular contact with the CPRE over a wide range of issues, and we stand ready to meet the council to discuss matters of mutual interest.

Mrs. Golding: Is the Secretary of State aware that some of the strongest traditional supporters of the Conservative party are completely opposed to the privatisation of the water authorities? Will he meet the CPRE and other groups in the countryside so that they can tell him of their anxiety and give him good reasons why water should not be privatised?

Mr. Ridley: The hon. Lady comes from a county where large numbers of people are extremely well served by a private water company, so I do not see why she is so up in arms about this. However, I am always prepared to meet anybody to discuss this important measure. I hope that people will discuss the measure when it is laid before the House, not this Session, and see the proposed details. because much of the opposition is based on misapprehension.

Mr. Andrew MacKay: Given that my right hon. Friend wants to communicate with the CPRE, at present he may find difficulty in doing so by telephone. If so, can he have a word with the husband of the hon. Member for Newcastle-under-Lyme (Mrs. Golding) to see whether the position can be improved?

Mr. Ridley: A little pillow talk in that respect would be welcomed by all those who want to communicate with many other people.

Mr. Allan Roberts: When the Minister meets the CPRE, will he discuss the fact that the water authorities are some of the biggest polluters of the rivers that they are responsible for cleaning, and that that is a consequence of the lack of public investment in our sewerage system? Will he point out that if private investors take over the water authorities they will not be interested in cleaning pollution? No one in his right mind would buy the Mersey, for example, to make money from an open sewer full of mercury and sewage.

Mr. Ridley: That is a bit strong, considering that we have replaced the cuts in investment which were made under the Labour Government, whom the hon. Gentleman supported. We have now returned to a high level of investment in water. Indeed, it is perhaps at its highest level in the Merseyside area, which has a huge programme for cleaning the Mersey basin. We strongly support that and have made money available for it. The hon. Gentleman was a little ungenerous about realising what has happened since we got rid of the Labour Government.

Mr. Hill: Does my right hon. Friend agree that local government reorganisation in the early 1970s, which included the water boards, was a disaster and that many of the water authorities were private companies before then? Is it not pure justice that we should now privatise them again?

Mr. Ridley: I must be careful in responding to my hon. Friend, because I cannot remember which disaster fell before or after I resigned from the Government of the time. Consumers will be served better and it will be greatly in the national interest to remove the constrictions of Government from the water industry so that it can get on with the job of serving consumers.

Dr. Cunningham: In expressing our complete opposition to privatisation of the water industry, may I ask the Secretary of State to explain why he refuses to respond to the CPRE and to my hon. Friend the Member for Houghton and Washington (Mr. Boyes) on why the European Economic Community has advised his Department that it could not recognise privatised water undertakings as competent authorities under EEC legislation because they would be responsible for pollution control and the supply of water? Will the Secretary of State answer that question? Why are the Government hesitating?

Mr. Ridley: There are three mistakes in that question. The hon. Gentleman mispronounced his hon. Friend's constituency; the EEC is now called the European Community, not the European Economic Community; and it has not advised my Department as he suggests. The CPRE has obtained a legal opinion as to what a competent authority is. I suggest that that is premature, because until the hon. Gentleman sees the proposals drafted in the Bill it is impossible to interpret whether that legal opinion is right or wrong. Let us make the proposals before we submit them to counsel.

Reema Dwellings

Mr. Meadowcroft: asked the Secretary of State for the Environment what action he is taking to rectify defects in Reema dwellings.

Mr. John Patten: My Department is carrying out research into the possible problems of large panel system buildings, including all the various Reema types. If the findings show that we need to give advice about appraising or repairing the buildings, we shall do so as a matter of urgency.

Mr. Meadowcroft: Will the Minister accept that this is not strictly a political difference between us, but a huge financial problem that is not capable of being dealt with within the confines of the Housing Defects Act 1984? There are 24 blocks in Leeds each requiring at least £1·5 million spent on repairs. Will he accept that treatment of them, similar financially to that of Airey buildings, which has been successful, would be the best way to do it and that it should be taken separately from the Housing Defects Act?

Mr. Patten: I congratulate the hon. Gentleman on his appointment as the alliance housing spokesman. I look forward to speaking to him often about matters and trying to draw out a few nuances of policy.
The large panel Reema buildings are not designated under the Housing Defects Act. While the hon. Gentleman charmingly and smilingly says that there is no political difference between us, I remind him of the cruel and vicious words he said about me in the Yorkshire Evening Post last week.

Mr. Key: I thank my hon. Friend for the survey that he is undertaking into Reema buildings. May I urge him to look at the whole problem of rural housing in areas such as Salisbury district council, which, incidentally, is not under any party political control? It is facing the impossible position where a number of Reema buildings need attention, but it has no money with which to do that, even though it has been given the discretion to repair them and formulate its own policy by the Government.

Mr. Patten: Work is going on into Reema buildings and their problems by the Building Research Establishment and that work is not yet finished. We have allocated at least an extra £14 million to be bid for by local authorities for extra help if they find themselves unable to meet their statutory undertakings under the Housing Defects Act 1984.

Mr. Fatchett: Given that I have not said any unpleasant things about the Minister in the Yorkshire Evening Post—[HON. MEMBERS: "Shame."]—perhaps I should take this opportunity tb do so. May I put to the Minister the real problems that exist in Leeds, given that we have 20 or more Reema blocks that each need £1·5 million to be spent on repairs and renovation? Unless we have action from the Government, the tenants living in those blocks will face serious problems. It is no good the Minister saying that the housing investment programme allocation takes account of the problems of defective buildings, because the reality in Leeds is that, in real terms, under this Government, the housing investment programme allocation has been cut by two thirds. When is the Minister going to do something on behalf of the people of Leeds and those who live in those blocks?

Mr. Patten: I have visited the hon. Gentleman's constituency, as he knows. There are certainly problems associated with the blocks, but the hon. Gentleman and the hon. Member for Leeds, West (Mr. Meadowcroft), who speaks for the alliance, referred to sums of money that


need to be spent per block. We have had no report from Leeds city council, and I have no idea what the figures are based on.

Mr. Peter Bruinvels: I appreciate that Reema buildings have not yet been designated. However, will my hon. Friend look at the whole operation of the Housing Defects Act 1984, in particular at the Smith houses, because Leicester city council—

Mr. Speaker: Order. The question is about Reema housing.

Homeless People

Miss Maynard: asked the Secretary of State for the Environment what is his latest estimate of the number of homeless people in England.

Mr. Ridley: About 100,000 households were accepted as homeless by local authorities in the year ending September 1986, all of whom have, or course, found accommodation.

Miss Maynard: Does the Secretary of State agree that the figure is so high because the total building programme every week since the Tory Government came to power in 1979 is 2,000 fewer homes than the weekly record under the previous Labour Government?

Mr. Ridley: I think that the hon. Lady has got it wrong. This is the number of people who have been accepted as homeless by local authorities and have either been found new tenancies in council houses or in hostels or bed-andbreakfast accommodation. They are not the people without homes, just the people who are classified as homeless.

Mr. Squire: Will my right hon. Friend accept that many homeless people find homes ultimately through what are termed houses in multiple occupation? There is a Bill covering that due for discussion shortly, around which strange rumours circulate. Does he agree that if the Bill should not proceed further there is still a responsibility on the Government to improve the conditions of so many of the properties?

Mr. Ridley: I agree that there is a need to provide more accommodation in certain parts of the country for such people. That is why we have given extra resources to the Housing Corporation so that it can attract private money to run up as many hostels as quickly as possible to house these people— high quality hostels and temporary accommodation of all kinds. That will be a major contribution to helping alleviate the problem.

Mr. Hancock: Can the Secretary of State tell us what help he will give to an authority such as mine which has faced an increase of 49 per cent. in the past financial year in the number of homeless people? Will he reconsider his plans to designate the 80 authorities for special help from the Housing Corporation and include Portsmouth within those 80-odd districts?

Mr. Ridley: I do not have the details of Portsmouth's problems. However, we have already made our allocations for housing for this year. I hope that Portsmouth will allocate the vast proportion of its resources either to improving run-down accommodation or to providing homes for the kind of people whom we have been discussing.

Mr. Heddle: Does my right hon. Friend agree that the Labour-controlled local authorities which leave their local housing stock empty for three, six, nine, 12 or even 18 months would do better to use it to house the homeless? Does he further agree that the eight inner London local authorities highlighted in the Audit Commission report last week have taken twice as long to relet vacant houses as any other authority and thus wasted ratepayers' and taxpayers' money by housing people in inadequate homeless accommodation?

Mr. Ridley: My hon. Friend is correct. On 1 April last year, 113,000 council houses were empty and a quarter of those had been empty for more than a year. As my hon. Friend has said, the problems are greatest, for example, in the famous eight London boroughs, where the inefficiency and ineptitude are greatest causing the deepest suffering to those who are without homes. When we hear on top of that that the eight Labour controlled councils in London are spending about £20 million a year on nonsense and political propaganda of one sort or another, we realise that that money could be used to house the homeless rather than being wasted on gesturing and zealotry, which is the curse of the modern Labour party.

Mr. Speaker: Mr. Fraser.

Mr. James Lamond: Windbag.

Mr. John Fraser: Will the Secretary of State acknowledge that the disgraceful figure of 100,000 homeless a year is a record for the number of people who find themselves without a home? Will he accept that we regard it as a callous misjudgment to believe that people are properly housed when they are living in hostels or bed-and-breakfast accommodation, which the Secretary of State's Department acknowledges costs massively more than the cost of building a new home? That is a crazy form of economics and the Secretary of State's words will be greeted with dismay and people will be aghast at his comments.
Does the Secretary of State not recognise that if a Government reduced the number of homes being built for rent by almost 100,000 a year, the consequence will be the disgraceful figures that the right hon. Gentleman has announced to the House this afternoon?

Mr. Ridley: I will not enter into the controversy as to whether the hon. Member for Norwood (Mr. Fraser) is a windbag. However, there are 113,000 empty council properties, many of which have been empty for a long time. The solution to the problem is to improve those properties so that people can be housed in them. It is not simply a matter of throwing more good money after bad where councils are not prepared to take the necessary steps to make housing available to the homeless. That position shocks me. Yes, the figure of 100,000 homeless is very high. However, the hon. Member for Norwood must not confuse that with the number of people who have nowhere to live. He knows perfectly well that that figure is the number of people who have been rehoused in one form or another. I will not have that mistake deliberately made by the Labour party.

Estate Action

Mr. Gerald Howarth: asked the Secretary of State for the Environment what information is available to council tenants and local authorities concerning the work of estate action, the urban housing renewal unit.

Mr. John Patten: We have put out massive amounts of information—films, booklets, and reports. No authority has any excuse for not knowing what help is on offer. If any council, or any tenant, wants to know more, let me know and my Department will be in touch immediately.

Mr. Howarth: In commending my hon. Friend for the operation of the scheme, may I remind him that, thanks to a £307,000 grant, the Rawnsley estate in my constituency has benefited to the extent of 72 properties? Will he look favourably on phase 2, which I understand is to be examined next week by my hon. Friend's officials to complete the properties? Will he tell the House whether the transfer of these properties into private ownership is to be encouraged under the scheme?

Mr. Patten: I am glad that my hon. Friend is pleased about the way in which estate action has been able to help in the Cannock chase area. Nationally, this year we shall have helped, through estate action, more than 100,000 people, in 53,000 homes, to live in better conditions. I shall look with interest at the advice I receive from my officials—as always dispassionate advice—about my hon. Friend's constituency and its problems.

Mr. Madden: The activities of estate action are welcome. However, does the Minister accept that people in Bradford who are in desperate housing need wonder why the Government have refused the city council permission to borrow more to build homes and to use capital receipts for building purposes. They are bewildered as to why the Government have cut housing improvement grants to enable improvement and renovation to take place. Will the Minister give information about Government policy, which is stopping the city of Bradford from tackling its housing crisis?

Mr. Patten: I thank the hon. Gentleman for his welcome for the work that estate action is doing. That is a good sign of all-party consensus. I know that it is shared by bodies such as the Association of Metropolitan Authorities. Bradford's problems are not necessarily cured by releasing large sums of money. We need to ensure that the money is spent well, and that is precisely what estate action is doing.

National Parks

Mr. Knox: asked the Secretary of State for the Environment whether he is satisfied with the current administration of the national parks.

Mr. Waldegrave: Yes, Sir, but there is always room for improvement.

Mr. Knox: Is it fair that people in the Peak district national park should have planning decisions taken by those who are not their direct representatives? Would my hon. Friend's constituents in Bristol, West feel kindly if their planning decisions were taken by people who were not direct representatives?

Mr. Waldegrave: I am not sure that the analogy entirely works, because many councillors who take planning

decisions about my constituency do not come from Bristol, West. However, there is a real problem behind what my hon. Friend says. There are not enough local residents among the county and local authority appointees on the national parks boards. I have tried to rectify that by making sure that seven out of the 11 that my right hon. Friend the Secretary of State appoints are local residents, but I endorse my hon. Friend's point.

Mr. Campbell-Savours: Will the Minister pay tribute to the Lake District planning board for the excellent way in which it manages the affairs of the Lake District national park? Does he accept that the excellent work being done by the European Year of the Environment committee in promoting national parks and other areas of environmental interest and concern will greatly benefit our people?

Mr. Waldegrave: I am happy to endorse the hon. Gentleman's tribute to that park, and to all the parks. We have increased the supplementary grants to the national parks by 13 per cent. this year in recognition of the valuable work that they are doing. It is vital that their publicity campaign, to which the hon. Gentleman referred, shows our people what there is to find in the parks.

Mr. McLoughlin: Is my hon. Friend aware that of the 184 people who make up the members of the seven national park boards in England and Wales, only 42 live in the areas of the parks? Is he also aware that on the Peak district planning board, of the eight people appointed by the county council only one lives in the area of the Peak park? What other planning authorities are there where people are not directly elected or do not have to meet certain residential qualifications?

Mr. Waldegrave: There is a problem which, in the Peak district, in particular, is bound up with political divisions, because supporters of the Labour party tend to live in cities rather than in the countryside. I urge those councils, Labour-controlled though they be, to take care to represent the interests of those who live in the area as well as the interests of those who visit from outside.

Mr. Livsey: Will the Minister take the point that the farming community is inadequately represented on national park committees, and in some cases there is only one farmer on the committees?

Mr. Waldegrave: I am not sure that the hon. Gentleman would find overwhelming support for that view other than, perhaps, in the farming community. We need to maintain the balance between national, recreational and farming interests. We try to do that and I think it has been recognised that we have not done it too badly in recent years.

Mr. Soames: Will my hon. Friend consider carefully what steps he could take to advise the administration of the national parks on how to deal with the serious litter problem? Is he aware that many of the people who go into the national parks despoil the countryside by scattering litter all over the place? Will he greatly increase the penalties for that offence?

Mr. Waldegrave: Proposals for increasing the penalties are before the House. Perhaps I could return to the first question about the Peak parks. I have seen the work of the well organised ranger service. The rangers collect tons of litter at the end of each week in the summer. This is a most


appalling phenomenon. The penalties for causing litter are quite high, but the difficulty lies in getting the local courts to impose worthwhile fines.

Land Use (Rural Areas)

Mr. Kirkwood: asked the Secretary of State for the Environment whether he will now publish a White Paper on his proposals for land use in rural areas.

Mr. Ridley: Our policy is, and continues to be, to protect green belt land and land of environmental importance. There is no question of allowing uncontrolled development in the countryside.

Mr. Kirkwood: Will the Secretary of State acknowledge that people in agriculture and people interested in rural use share a widespread anxiety about a vacuum in the Government's policy? Will he confirm the existence of an interdepartmental committee on alternative land use and rural employment, and will he give us an undertaking that the endeavours of that committee will eventually be published?

Mr. Ridley: The Government will make such policy statements as they wish in their own good time. Wherever there is a policy vacuum it is likely that the Liberal party will try to fill it at the same time as the SDP, with the disastrous result of a collision in the middle.

Mr. Chapman: May I remind my right hon. Friend that established green belt land represents less than 20 per cent. of England's countryside? Is that not all the more reason for asserting that the Government will protect those green belts, and for reminding any political party which thinks that the green belts should be breached that such belts command widespread support? In the words three years ago of the Select Committee on the Environment, the green belts should be regarded as sacrosanct.

Mr. Ridley: I entirely agree with my hon. Friend that we must preserve the green belt. We have no intention whatever of departing from past policies about that. We do not, as the hon. Member for Birmingham, Perry Barr (Mr. Rooker) advocates from the Opposition Front Bench, believe that we should have green lungs with development running up to them on the green belt. We entirely reject that policy.

Mr. Rooker: Why does the Minister tell lies?

Hon. Members: Order.

Mr. Speaker: I think I also heard unparliamentary expression. Perhaps it could be withdrawn.

Mr. Rooker: I withdraw the unparliamentary expression, Mr. Speaker.

Mr. Home Robertson: Does the Minister accept that tinkering with planning controls is no substitute for a proper strategy for rural economic development? Will he now answer the question put to him by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood)? Is there a Cabinet Committee studying alternative land use and rural employment? If there is, what is it doing?

Mr. Ridley: As the two hon. Gentlemen are from Scottish constituencies, it is difficult to know whether these questions should properly be addressed to the Secretary of State for Scotland. If the Government wish to make proposals, as I am sure they will from time to

time, on how best to promote and preserve the rural economy, they will do so in their own good time. I make it clear that we have no proposals for re-rating agricultural land, which is apparently the policy of the SDP.

Mr. Maxwell-Hyslop: Will my right hon. Friend pay special attention in rural planning to places where schools are full and there is no capital available to build new ones? That should cause an infrastructure interdiction in just the same way as sewerage capacity or water supply.

Mr. Ridley: Capital allocations for education are matters for my right hon. Friend the Secretary of State for Education and Science. These matters should form part of the structure plan or, in due course, I hope, the district plan that the district will produce. Of course, planning considerations are relevant.

Dr. David Clark: I begin my question by making the point that my hon. Friend—[Interruption.]

Mr. Speaker: Order. The hon. Gentleman should ask a question.

Dr. Clark: I listened carefully to the—[Interruption.]

Mr. Speaker: Order. We are making slow progress. We have reached only question No. 7. Question please.

Dr. Clark: I listened carefully to what the Secretary of State said. Will he give the House a categorical assurance that the report in The Observer that the Government intend to weaken the green belt around our major industrial conurbations is untrue?

Mr. Ridley: Yes, Sir.

Building Industry (Black Economy)

Mr. Latham: asked the Secretary of State for the Environment whether he will instruct his working party on the effects of the black economy on the building industry to complete its inquiry and publish its report by Whitsun; and if he will make a statement.

Mr. John Patten: This working party will not be confined to the effects of the black economy. It will be looking at a range of issues such as the role of guarantee and warranty schemes in smaller scale building works. There are no instant solutions to these complex issues and many organisations, such as the building societies, have asked how to be involved. It will just not be possible to come up with soundly based proposals by Whitsun.

Mr. Latham: Is my hon. Friend aware that it is now one and three quarter years since his predecessor produced a Green Paper promising just these discussions with the industry on all the fiddles, rip-offs and other disasters that go on in the home improvement industry? Will he please give his Department a good boot up the backside and tell it to produce some specific proposals now?

Mr. Patten: There are no bad civil servants, only bad Ministers. If any kicks up the backside must be administered, they must be administered to Ministers. My hon. Friend has already administered such a kick to me in his excellent comment in an excellent periodical, Building, last week. Apart from that, all the letters and representations that we have received welcome the working party. They total 22. I understand what my hon. Friend said from his great depth of experience of this issue.
Perhaps we should try to speed up our proceedings. I shall examine the matter again to see whether we can do so, but we shall not be able to do it by Whitsun.

Mr. Carter-Jones: If the working party reports and if, as is most likely, it recommends that there should be better trade training and better safety practices, will the Minister undertake to implement such recommendations speedily?

Mr. Patten: Yes, indeed. Only three weeks ago my hon. Friend the Under-Secretary of State for Employment and I met representatives of the building and construction industry and the trade unions to discuss just these problems. Afterwards, the meeting was described by one distinguished trade union leader, Mr. Albert Williams, as surprisingly constructive.

Mr. Favell: Does my hon. Friend agree with Lord Scarman that the black economy is a good thing, or does he agree with the vast majority of the country that dishonesty should be discouraged?

Mr. Patten: I certainly think that dishonesty should be discouraged.

Mr. Rooker: We also welcome the working party and add to the strictures placed upon it by his hon. Friend the Member for Rutland and Melton (Mr. Latham).
Will the Minister take on board this important point? An unregulated industry leading to a black economy has horrendous consequences for health and safety in the industry. The Minister and the working party must take on board the consequences of the deaths of workers on building sites and, in particular, on demolition sites. That cannot be divorced from the ramifications of the black economy in this industry.

Mr. Patten: I discussed these points this morning with the National Economic Development Council. The hon. Member raised some serious points. Trade union voices will be heard on the working party and they will have a chance to make representations about these issues.

Local Government Officers (Vacancies)

Mr. Sumberg: asked the Secretary of State for the Environment whether the Government have any plans to seek to ensure that vacancies for officers in local government are not advertised in party political publications; and if he will make a statement.

The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): We are discussing with the local authority associations the code of recommended practice designed to prevent this.

Mr. Sumberg: Is my hon. Friend aware that the Labour-controlled authority in Bury recently advertised for a director of social services in Labour Weekly? Is there not a clear implication that only Socialists need apply? [Interruption.] Will my hon. Friend take firm legislative action to stop this abuse?

Mr. Chope: I am very surprised that Opposition Members seem to approve of such a practice. Advertisements for local government officers in party political publications are inconsistent with the long tradition of politically impartial local government. To answer my hon. Friend's question, whether there was motivation to find a Labour party member to fill the post,

or merely to make a ratepayer contribution to the advertising budget of Labour Weekly, it is an outrageous abuse of local authority power.

Mr. Tony Banks: Is the Minister aware that the London borough of Newham will not be advertising for vacancies either in Labour Weekly or in the Daily Telegraph, which is a Tory party newspaper, or in any other newspaper, because all vacancies have been frozen on account of the Government's attack on the London borough of Newham? Is the Minister aware that today 10,000 people marched through the borough protesting at the cuts that the Government are imposing upon us? If the Government will not listen to the arguments from Newham Members of Parliament in this House, they will have to listen to the people of Newham on the streets.

Mr. Chope: It is very good news for the ratepayers of Newham that at last the council is responding to the need to live within its budget. I regard it as totally irresponsible of the council workers to withdraw their services. I always thought that the hon. Member was arguing about the need to provide local authority services. To withdraw them in these circumstances shows just where his true loyalties lie.

Sir Kenneth Lewis: Is my hon. Friend aware that, arising out of many of these advertisements, far too many councillors, mostly Labour councillors, employed by one council, become councillors on another council?

Mr. Chope: Yes. There is widespread concern about the practice of what I think is called twin-tracking. The Widdicombe report had much to say about it. We are considering what we need to do in legislative form.

Mr. Winnick: Is the Minister aware that when I saw the question on the Order Paper I wondered why a Conservative Member of Parliament should be attacking Conservative newspapers, since most of the Tory newspapers carry a large number of advertisements and those papers are very faithful to the Tory party? Will the Minister give us an assurance that, despite what his hon. Friend the Member for Bury, South (Mr. Sumberg) said, the offices of Labour Weekly will not be searched and invaded by the special branch?

Mr. Chope: Labour Weekly is a matter for the people who run that newspaper. They are trying to fund the newspaper out of ratepayers' money. I do not want hon. Members to think that the abuse that has been described by my hon. Friend the Member for Bury, South (Mr. Sumberg) is limited to Labour party publications. In the January issue of Marxism Today Haringey council is advertising for a member for its direct works department.

Business Rate

Mr. Colvin: asked the Secretary of State for the Environment what responses he has received concerning his proposals for a uniform business rate.

Mr. Chope: My right hon. Friend placed a summary of responses to the Green Paper in the Library on 15 December.

Mr. Colvin: Even if we may accept the principle of a uniform business rate, does my hon. Friend realise that it could cause glaring injustices in certain localities? Is he aware that the village of Fawley in my constituency, living as it is under the shadow of the oil refinery, has for many


years been the Cinderella of local government inputs, although paying a very great amount in rates? Is he further aware that it is the local parish council that has taken the initiative in providing services for my constituents in that area? What guarantees can he give that the parish council will not he deprived of the £90,000 of rate income that it receives out of a total rate precept of £123,000 if a uniform business rate is introduced? Otherwise, it will impose an unfair burden on domestic ratepayers in the area.

Mr. Chope: I hope that my hon. Friend supports the Green Paper proposals, because domestic ratepayers in Hampshire, including those in Fawley, will benefit significantly from them. However, it is right for my hon. Friend to remind the House of the enormous contribution made by Esso to Hampshire rates. That is particularly apposite at a time when both the Labour party and the alliance parties on the council are vying with each other to propose a far higher rate increase in Hampshire than is necessary.

Mr. Alton: Can the Minister give the House an assurance that before any business rate changes are made that there will be a general rating revaluation? Is he aware that in Liverpool no revaluation has occurred since 1972? We now have the third highest business rate of any of the 36 metropolitan districts, and stores such as the city centre Marks and Spencer are paying the same rate as Marks and Spencer in Marble Arch in London. Does the hon. Gentleman agree that there is a good case for rate relief to he given to businesses in cities such as Liverpool?

Mr. Chope: A revaluation is scheduled for 1990. One of the great merits of the national non-domestic rate is that it will help businesses in the north. For example, in Liverpool it will benefit businesses to the extent of reducing their burden by some 31 per cent. on present projections. which shows the advantages of the proposals.

Mr. Hind: Following what my hon. Friend has just said, will he keep to the principles that he has put forward by introducing a uniform business rate, and bear in mind that it will bring much-needed relief in the northern inner cities, where they are over-rated by Left-wing Labour councils, which are not responsible in their approach to rates and are driving jobs and enterprise from those cities?

Mr. Chope: My hon. Friend has put his finger on the main benefit of the proposals. Businesses in the north will gain over £500 million a year from the national non-domestic rate alone.

Dr. Cunningham: How can these proposals—which, in effect, give the Government control over 80 per cent. of local government income—be consistent with increasing responsibility and accountability at local level? How can the Minister say that they will be beneficial to the north when Manchester would lose about £29 million of income a year, Sheffield £25 million a year and Newcastle upon Tyne £25 million a year and London would suffer a redistribution of income of almost £1 billion as a result of these proposals? How will that help to alleviate inner city problems?

Mr. Chope: I do not accept the figures that the hon. Gentleman has quoted. Non-domestic rates conceal the true cost of local services to domestic ratepayers. On average, at present, for every £10 that is raised in rates £6 is paid by non-domestic ratepayers.

Residential Development

Mr. Butterfill: asked the Secretary of State for the Environment whether he has any plans to review the powers of local planning authorities to control the type of home erected on land designated for residential development purposes; and if he will make a statement.

Mr. Ridley: No, Sir. Local planning authorities already have wide powers to determine planning applications submitted to them.

Mr. Butterfill: Is my right hon. Friend aware that there is a problem in Dorset, in that whenever we re-zone land for housing it is covered with a sea of bungalows that are marketed nationwide to the elderly, which aggravates the imbalance of our population and does not provide for the needs of local people? The chief planning officer in Dorset says that he does not have sufficient powers to create a reasonable balance of population in the area. Is there a need to reconsider whether a circular should be issued to such authorities to enable them to exert the necessary powers to create a balanced population?

Mr. Ridley: I do not want to discriminate against the elderly, as I shall be elderly myself in due course. My hon. Friend should not be against the elderly being able to find suitable places in which to live where they want to live. I think my hon. Friend will agree that we do not want councils to engage in social engineering to decide who shall live where; people should decide where they wish to live for themselves. The planning legislation is solely about the merits of certain land uses, not about who should take up those uses. That has always been so and always should be so.

Mr. Nicholas Baker: Does my right hon. Friend agree that, although it is quite correct that local authorities should not engage in social engineering, people should be advised to think carefully before retiring in a place away from their friends, family and former workplace?

Mr. Ridley: I must again say that I hesitate to give that advice. I can only tell my hon. Friend that when I retire I want to get as far away from this place as possible.

Housing Investment Programme

Mr. Pike: asked the Secretary of State for the Environment what representations he has received since the 1987–88 housing investment programme allocations were announced.

Mr. John Patten: I have received a number of representations.

Mr. Pike: The Minister recently said that he was not able to visit Burnley or receive a delegation from the city to consider its acute problems. Like many other local authorities, Burnley faces a rapidly deteriorating housing situation in the private and public housing sectors because of the level of capital and HIP allocations. When will the Government take action to deal with these problems and to stop this downward spiral in housing standards?

Mr. Patten: I pay as many visits as I can to cities and towns such as Burnley. I hope that one day I shall be able to go to Burnley. Indeed, I was in Manchester last Thursday paying such a visit. Burnley has begun to do one thing which is very important—co-operate with the private sector in getting private investment in its council


housing stock, notably on the Bleak house estate. I am surprised that Burnley council has not approached my Department's estate action unit for help with its housing problems.

Mr. Forth: Will my hon. Friend confirm that, when a significant number of properties in a town are found to have major defects which will be expensive to repair, his Department will give due consideration to helping the local authority or private individuals concerned, especially if the properties were built under the auspices of a new town corporation which no longer exists?

Mr. Patten: I am aware from my recent visit to Redditch in my hon. Friend's constituency of the problems that affect his constituency, especially some houses with, I believe, timber truss roofs which seem to be causing some problems. My regional office is in communication with the council on this problem.

Mr. Rooker: Does the Minister appreciate that probably some 2 million homes were built using the same design as the houses in Redditch which are seriously under pressure? Is the hon. Gentleman satisfied that the overall housing investment programme, even including all the private money that he can get into it, is sufficient to stop the housing stock from deteriorating, let alone improve it, in view of the rate of deterioration? In other words, is it enough to stand still?

Mr. Patten: We are doing much more than standing still. We are improving the housing situation. I owe the hon. Gentleman a long and detailed letter in response to his long and detailed letter of about 10 days ago on these points. I shall endeavour to send that letter to him as soon as possible.

Political Advertising (Local Authorities)

Mr. Heddle: asked the Secretary of State for the Environment what further plans the Government have to control large amounts of money spent by local authorities on political advertising.

Mr. Chope: Later this Session we shall introduce legislation to reinforce the 1986 Act and will publish the code for which the Act provides.

Mr. Heddle: I welcome my hon. Friend's announcement. Is it not a disgrace, and will my hon. Friend confirm, that all eight of the inner London authorities highlighted by the Audit Commission as verging on bankruptcy engaged in political propaganda and advertising at the ratepayers' expense? Will my hon. Friend have time during his busy day to look at the January edition of "Sanity" and observe that local authorities from the north of Scotland to London are wasting £2,500 or more of ratepayers' money simply issuing messages of peace and goodwill? Would it not be better if they were advertising prudence and common sense to the ratepayers?

Mr. Chope: My attention has been drawn to some of the advertisements in the January edition of "Sanity". I suspect that most of the advertisements inserted by the local authorities are already illegal and that there is no need to impose further legislation. I hope that those authorities will be referred to the relevant auditors.

Mr. Haynes: Why did the Minister not slap down his hon. Friend the Member for Mid-Staffordshire (Mr.

Heddle) for tabling such an outrageous question? Is the Minister aware that Conservative local authorities also advertise in political magazines and newspapers? What about the Tory press? Why does the Minister not be fair on this issue?

Mr. Chope: I am not aware of any Conservative-controlled authorities—

Mr. Haynes: What about Wandsworth?

Mr. Chope: —including Wandsworth, which advertise in party political publications. If the hon. Gentleman knows of any, I should be delighted to write to those authorities in just the same strong terms as I would to a Labour-controlled authority.

Mr. Dickens: Does my hon. Friend accept that it is rather ironic that the very Left-wing councils which complain and bleat about Government cuts—which of course do not exist or are caused by their own overspending—spend hundreds of thousands of pounds each year on political propaganda? It must be stopped, and it will be stopped.

Mr. Chope: I agree completely with my hon. Friend, except that he understates the problem. It is not hundreds of thousands of pounds, but millions of pounds that are being wasted.

Housing (Voluntary Sector)

Mr. Beith: asked the Secretary of State for the Environment whether he has any plans to encourage housing developments by the voluntary sector outside designated stress areas.

Mr. John Patten: Under the increased programme my right hon. Friend announced on 9 December, some £123 million worth of new development is available for allocation outside the stress areas—an 83 per cent. increase over 1986–87. Whether inside or outside stress areas, housing associations can benefit from the new private finance schemes by which £30 million of grant will generate £100 million of new housing investment.

Mr. Beith: Is the Minister aware that the Housing Corporation, in its policy statement for the north-east, indicated that there would be virtually no money available for voluntary housing schemes outside the stress areas, such as rural Northumberland and the small towns of Northumberland? Will he try to induce some change in attitude so that there may be some limited voluntary housing development, which is so useful in dealing with problems in those areas?

Mr. Patten: I entirely agree with the hon. Gentleman about the problems facing rural areas such as those in his constituency. More money has been made available by my right hon. Friend the Secretary of State to the Housing Corporation for 1987–88. I suggest that the hon. Gentleman has a word with the Housing Corporation. I also hope that he will have a word with his hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) about that most unparliamentary jersey he is wearing.

Mr. Jessel: Within the voluntary sector, is my hon. Friend aware of the excellent work that has been done over 20 years by the Richmond upon Thames Churches Housing Trust, and is that not an encouragement and an example to the rest of the country?

Mr. Patten: The housing trust's record is exemplary, like almost all activities in my hon. Friend's constituency.

Rate Support Grant

Mr. Terry Davis: asked the Secretary of State for the Environment how many representations were received in his Department by 19 December 1986 in response to his consultation paper on rate support grant published on 3 December 1986.

Mr. Chope: We have received representations from four of the local authority associations and comments from 73 local authorities in response to the consultation paper on rate support grant published on 3 December 1986. In addition, my hon. Friend the Minister for Local Government and I have seen deputations from a number of authorities and hon. Members.

Mr. Davis: What changes in the proposals have been made as a result?

Mr. Chope: As a result of the representations that were made on the earlier consultation paper significant changes were made, but as a result of the substantial support for the revised proposals no changes were made.

Mr. Phillip Oppenheim: Has my hon. Friend noted that the Government's failure to propose raising the rate support grant for Derbyshire this year by more than four times the rate of inflation has prompted the Left-wing leader of the county council to describe this action as "shades of a Hitler regime"? Is this not a despicable comment and an insult to the many Conservatives who fought against the Hitler regime in the last war?

Mr. Chope: It is an outrageous comment, particularly when Derbyshire is to get an extra £18·4 million in grant next year, and perhaps it is more than many of my hon. Friends would wish. It is right to say that the sort of outrageous comments that Mr. Bookbinder made will ensure that he never gets elected to the House.

Bed and breakfast Accommodation

Mr. Wainwright: asked the Secretary of State for the Environment what plans he has to seek to reduce, during the United Nations International Year of Shelter for the Homeless, the number of people living in bed and breakfast accommodation.

Mr. John Patten: Local authorities have been asked to concentrate their available resources on homeless people

and others in special need; it is for them to decide how to accommodate people whom they have accepted as homeless. Recent Government measures to help reduce reliance on bed and breakfast accommodation were set out in answer to a question by the hon. Member for Liverpool, West Derby (Mr. Wareing) on 16 January. Further steps are continually being considered by us and, I am sure, by the authorities most concerned.

Mr. Wainwright: Does the Minister not realise that even allowing for the Government's recent changes to the bed and breakfast system, the amount spent on it is exorbitant and would more than cover the cost of building many dwellings for the homeless? Will he explain why he prevents local authorities from spending a higher proportion of council house sale receipts on providing homes for those who are incurring such exorbitant costs?

Mr. Patten: Local authorities will always need temporary accommodation to house people while they consider whether to accept them as homeless. It is something that will always be with us under any form of council control. I think that the hon. Gentleman should do more to welcome the substantial increase in provision for the homeless that has been made available by my right hon. Friend the Secretary of State's allocation of more money to the Housing Corporation so that further accommodation can be built for the homeless.

Mr. Nicholas Winterton: Will my hon. Friend give a more sympathetic response to the hon. Member for Colne Valley (Mr. Wainwright) and allow a greater percentage of the capital receipts that are received by local authorities to be spent on the building of specialist accommodation, especially for single persons and the elderly, which I believe would go far towards resolving the problems of homelessness? I refer especially to the problems of Macclesfield borough council, which wishes—having abided by everything that successive Governments have asked it to do—to spend money that it has in the hank on the sort of housing that is required in the area for which it is responsible.

Mr. Patten: I know how strongly my hon. Friend feels on this issue and I respect his views, as I respect what Macclesfield council has done through its housing policy over the years. We are currently approaching the problem of providing temporary accommodation for the homeless through the extra moneys that have been given to the Housing Corporation, a programme that I hope will continue in future.

Police Complaints Authority (Report)

Mr. Stuart Holland: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the need for immediate publication by the Government of the report of the Independent Police Complaints Authority into the role of Inspector Douglas Lovelock in the shooting of Mrs. Cherry Groce.
The matter is specific inasmuch as it concerns both individuals and the issue of police procedures in the use of firearms. It is both important and urgent in terms admitted by the Home Secretary in his letter of 11 November 1985 to Mr. Astel Parkinson of the Lambeth police consultative group, in which he said of the incident involving Mrs Groce:
If no charges were to be brought (by the authority) … then there would be no such bar to early publication … In that situation, if it were to arise, full and early account from the Authority of the circumstances involved would be all the more necessary in the public interest".
This admission by the Home Secretary of the importance of a full and early account from the authority conflicts with his written answer to me published in Hansard yesterday that
the Police Complaints Authority has received from the commissioner a memorandum under section 90 of the Police and Criminal Evidence Act 1984 containing proposals in respect of disciplinary action arising from this incident.
He added:
Memoranda under section 90 of the 1984 Act are not published."—[Official Report, 2 February 1987; Vol. 109, c. 477.]
However, unless the proceedings of the disciplinary inquiry are published, it will not be clear whether or in what way the Metropolitan police investigated, first, the claim that Inspector Lovelock had worked some 13 hours the previous day on hazardous work including the use of firearms; secondly, whether later that day and on the evening before the raid on Mrs. Groce's home he had been drinking at the same strip club as the nine officers of the Hertfordshire force against whom disciplinary charges are being brought; thirdly, whether he admitted, or stressed either at the time or later during the disciplinary inquiry, that he had been drinking in that club, and that he did not wish to take part in the armed search of Mrs. Groce's home for that reason; fourthly, how it could be, in such circumstances, that a request from a leading officer not to be assigned to the search raid early the following morning could have been refused by more senior officers; fifthly, whether those other officers insisted that he take part in

the raid while being aware that he had been drinking and that this was in contravention of a Metropolitan police regulation that no officer should drink alcohol within 24 hours of handling a firearm?

Mr. Speaker: One minute more.

Mr. Holland: It is widely known that the charges of unlawful and malicious wounding of Mrs. Groce brought against Inspector Lovelock have been dismissed in court. It is clear that Inspector Lovelock could not have borne malice against Mrs. Groce, any more than I bear any malice against him as an individual involved in an incident with so tragic an outcome.
However, this is the third occasion, after the Waldorf and Shorthouse cases, where the police have failed to pursue disciplinary charges against officers involved in the shooting of innocent civilians. Both in terms of the Home Secretary's commitment to publish
a full and early account from the (Police Complaints) Authority … in the public interest
and in terms of the principle that justice not only should be done but be seen to be done, the Home Secretary should both publish such an account and make a statement to the House—

Mr. Speaker: Order. The hon. Gentleman has had his three minutes.
The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the need for immediate application by the Government of the report of the independent Police Complaints Authority on the role of Inspector Douglas Lovelock in the shooting of Mrs. Cherry Groce.
I have listened with care to what the hon. Gentleman has said, but I regret that I do not consider the matter that he has raised as being appropriate for discussion under Standing Order No. 20 and, therefore, I cannot submit his application to the House.

Later—

Mr. Patrick Cormack: On a point of order, Mr. Speaker. Is it not a fact that when an hon. Member seeks leave to move the Adjournment of the House under Standing Order No. 20 he is supposed to give brief and succinct reasons why the debate should be granted and not make the speech that should be made if you, Mr. Speaker, were to grant the request?

Mr. Speaker: That is correct. Such applications are now limited to three minutes, and that is what the hon. Member for Vauxhall (Mr. Holland) had.

Palace of Westminster (Films)

Mr. David Steel: On a point of order, Mr. Speaker. You will have just heard at Question Time Ministers complaining about the abuse of ratepayers' money for party political propaganda. May I draw your attention to the fact that this morning a film called "Keeping the Peace" that has been produced by the Ministry of Defence was shown—

Mr. Robert Atkins: Is this a point of order?

Mr. Steel: It is a point of order for Mr. Speaker.
The film purports to be objective about the defence policies of this country, but it is suggested that it contains party political material. As it is difficult to judge whether the cost of £181,000 should be borne by the taxpayer through the Ministry of Defence or sent to Conservative Central Office, will you rule, Mr. Speaker, that this is one film that should be shown within the precincts of the Palace at the earliest opportunity?

Mr. Speaker: I hope that I shall never be put in the position again of having to rule about films shown within the precincts of the Palace of Westminster.

Mr. Tony Marlow: On a point of order, Mr. Speaker. I apologise for not giving you notice of this point of order.
In your great wisdom, Mr. Speaker, you gave a ruling that, until the House had decided on the issue, the film concerning Zircon should not be shown on the premises of the House of Commons. We are aware that the Leader of the Opposition has stated that he believes that this is a very important matter of national security. However, we read on the tapes today that an Opposition Front Bench spokesman, the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), intends to spread this wretched film all round Scotland to a wide audience.
Page 154 of "Erskine May" refers to
Other indignities offered to either House.

It refers to
Other acts besides words spoken or writings published reflecting upon either House or its proceedings which, though they do not tend directly to obstruct or impede either House in the performance of its functions, yet have a tendency to produce this result indirectly by bringing such House into odium, contempt or ridicule
I am concerned that the Leader of the Opposition does not have either the guts or the ability to control his Front Bench. As the House is likely to be—

Mr. Speaker: Order. Will the hon. Gentleman come to the point of order for me? He has drawn my attention to the relevant part in "Erskine May". At the moment, the film may not be shown within the precincts of the Palace of Westminster, and that is a matter for me. However, if it is shown in Scotland or anywhere else, it is not a matter for me; it is a matter for the Attorney-General.

Mr. Marlow: As you know, Mr. Speaker, the ruling is contained under the heading "Breaches of privilege and contempts". This is a further indignity. This House has decided, and you decided, that the film must not be shown here, and the Leader of the Opposition said that the film should not be shown here, yet an hon. Member—an Opposition Front Bench spokesman—is taking the trouble to spread this film around Scotland.
I submit that that brings this House into ridicule. If the film cannot be shown here, how can it be shown in Scotland? When you have made a ruling, Mr. Speaker, how can it be right for any hon. Member, especially a Front Bench spokesman, to take such action? We seek—

Mr. Speaker: Order. I think that I can help the hon. Gentleman. As I understand it, this film was shown in Wales and it was not subject to any injunction at that time. If that is so in Wales, I imagine that it may be so in Scotland.

STATUTORY INSTRUMENTS, &c

Ordered,
That the draft Nightwear (Safety) (Amendment) Regulations 1987 be referred to a Standing Committee on Statutory Instruments,&amp;c.—[Mr. Ryder.]

Fixed Parliaments

Mr. Tony Banks: I beg to move,
That leave be given to bring in a Bill to make provision for a fixed five-year term for the duration of Parliament.
I shall not delay the House—I do not want to stand between it and its weekly local government Bill.
Under my Bill, there would be a set date for a general election. Other than at the end of five years, a dissolution would be granted only if the Government of the day lost a formal vote of confidence.
Although present Parliaments can run for a five-year term, it is unusual for that to happen. Since the war, only the Government of 1959 has run the full term. Indeed, the average life of a Government since 1945 has been three years and five months.
My Bill would require the Government, given an adequate working majority by the electorate, to serve out the full term. The Governments of 1945—[Interruption.] I suggest that my hon. Friends cool themselves long enough to listen to my presentation. The Governments of 1945, 1951, 1955, 1959, 1966, 1970, 1979 and 1983 all had or have such working majorities, thus making an election before the end of five years technically unnecessary. Yet only the Government of 1959 served their time. We do not yet know whether the present Government, with their fairly massive majority, will do likewise.
In the case of a hung Parliament, or where a Government majority did not survive subsequent by-elections, a defeat on a formal confidence vote would precipitate a general election. Thus, my Bill would not automatically lock a Government into coalition against their wishes. A Government in such a particularly tenuous position could, if they rejected coalition, attempt to govern, and it would then be for Parliament to decide whether to give them support. A defeat on a formal confidence motion would, as I have already said, necessitate an election.
I do not disguise the fact that my Bill would take away the single, most important power enjoyed by a Prime Minister—the power, exercised alone, to determine the date of a general election. Such power is more obviously used to try to wrong-foot the Opposition, but it can he, and indeed it has been, used to threaten disaffected elements within the governing party of the day. I believe that in a democracy such personal power is overweening and undesirable.
It has become almost commonplace for Governments to manipulate the economy in an attempt to create the most favourable circumstances before making a dash for the polls. In party political terms, that is perfectly understandable, and even grudgingly admired if it works. However, such emphasis on short-term electoral fortunes contributes to cynicism among the electorate and creates instability within the economy.
With a fixed Parliament, there would be an end to the debilitating and unsettling media speculation about the date of the election. Such speculation weakens every Government, even those with substantial majorities, and by doing so eventually forces a Prime Minister's hand as the options visibly run out.
In recent months, both the Prime Minister and the Chancellor of the Exchequer have made pleas for more long-term planning within the economy. Yet the uncertainty over the election date makes long-term economic planning exceedingly difficult both domestically and internationally. Fixed Parliaments are normal practice in many other countries, including some of the most economically successful. In Japan, Norway, Switzerland and the United States of America elections cannot be called before their determined time. In West Germany, Belgium and Sweden, Parliaments can be dissolved early but only on a vote of no confidence. As I have already said, my Bill proposes a similar procedure for our own Parliament.
Even with fixed Parliaments, a Government would still seek to coincide economic success with the date of a general election. However, it would be done openly and the electorate would be equally aware if a Government stage-managed a defeat in a confidence vote.
If the House gives me leave to introduce it, the Bill will bring greater political stability, make economic planning less fraught, and restore to Parliament some of the power that has been taken away over the years by the Executive.

Mr. Geoffrey Dickens: rose—

Mr. Speaker: Does the hon. Member seek to oppose the Bill?

Mr. Dickens: I wish to oppose the Bill for one or two reasons, but I shall not unduly detain the House, Mr. Speaker.
Passage of the Bill would mean that the cries from Opposition parties of "Resign" to a Prime Minister or "Go to the country" to a Government would no longer be heard in this Chamber. Lobby correspondents and political journalists in the Press Gallery would be deprived of the pleasure of speculating when the election might be called. Therefore, I feel very sad that you should seek to deny so many people that pleasure—

Mr. Speaker: Order. It has nothing to do with me!

Mr. Dickens: I am very sad that the hon. Member for Newham, North-West (Mr. Tony Banks) should seek to deprive those people of that great joy and pleasure. As I do not wish unduly to detain the House, I shall not seek to force a vote.

Mr. Speaker: The hon. Member should sustain his opposition at least to the point of calling "No" when I collect the voices.

Mr. Andrew Faulds: On a point of order, Mr. Speaker—

Mr. Speaker: Order. I am on my feet and putting the Question.

Question agreed to.

Mr. Speaker: Who will prepare and bring in the Bill?

Mr. Banks: Not many takers for this one, Mr. Speaker, but what we lack in quantity we make up for in quality.
Bill ordered to be brought in by Mr. Tony Banks and Mr. Austin Mitchell.

FIXED PARLIAMENTS

Mr. Tony Banks accordingly presented a Bill to make provision for a fixed five-year term for the duration of Parliament: And the same was read the First time; and ordered to he read a Second time upon Friday 24 April and to be printed. [Bill 64.]

Orders of the Day — Rate Support Grants Bill

Order for Second Reading read.

The Minister for Local Government (Dr. Rhodes Boyson): I beg to move, That the Bill be now read a Second time.
The House has had to consider more than the usual share of local government finance in recent months—[Interruption.] I am glad that I have the unanimous approval of the House, at least at the beginning of my speech. I am not sure whether the amount of that legislation is a matter on which I should express my sympathy to the House, or vice versa. As hon. Members are aware, this legislation has arisen, for the most part, because of legal problems or deficiencies in the existing legislation and in the way in which it was thought to operate.
I am pleased to tell the House that the Bill is not of that category. It is a positive measure—[Interruption.]—designed to improve the operation of the current rate support grant system, at least until such time as we are able to bring in a new and more satisfactory system of local government finance. My right hon. Friend has already announced his firm intention to introduce legislation no later than the first Session of the next Parliament.
This is a Bill to abolish the procedure known as grant recycling. I shall summarise for hon. Members how the procedure works at present, and the disadvantages of this system, before explaining how the Bill seeks to replace it.
The block grant system may, if Plato will forgive me, he likened to his definition of democracy:
A charming form of government, full of variety and disorder, dispensing a sort of equality to equals and unequals alike.
That may also be a definition of grant recycling under the present arrangements my right hon. Friend announces, in the context of the rate support grant settlement, the aggregate amount of Exchequer grant available to local authorities for the year in question. From that he deducts the amounts estimated to be required for specific and supplementary grants, and after a further deduction for domestic rate relief grant the balance is the amount of money which he calculates will be available for distribution to local authorities as block grant. He also announces the principles on which that grant is to be distributed and estimates the amount of grant which each authority can expect to receive on the assumption of a certain level of expenditure. Some assumption about expenditure needs to be made at this stage, in order to be able to set the grant-related poundage schedules which govern the distribution of the grant total, and to provide examples of authorities' likely entitlements.
Authorities, however, in this fallen world, do not always spend at the levels we have assumed. Some authorities will turn out to have spent less, and will in most cases then be entitled to more block grant than anticipated. Other authorities will choose to spend more than has been estimated, in the full knowledge that their grant entitlement will decrease accordingly.
Under the present system, if the sum total of actual grant entitlements is calculated to be more or less than the


sum originally made available, the poundage schedule governing grant distribution is reset for all authorities in a supplementary report so that the aggregate of authorities' grants is equal to the original amount. So, when authorities spend more and lose grant entitlement the resulting underclaim is eventually redistributed among all authorities on a common poundage basis. Similarly, if some local authorities underspend and thus receive extra grants, all authorities lose some grant so that the total grant from the Government remains exactly the same. Hence the term recycling. This process continues periodically for some time after the grant year in question as new and better information about authorities' actual expenditure becomes available.
The procedure has several disadvantages, which have become increasingly apparent to the Government and clear to many local authorities. The first and most important of these is that authorities have no certainty about their likely grant entitlements at the crucial stage when they are setting their budgets and their rates for the forthcoming year.

Mr. Allan Roberts: Will the Minister give an assurance to local government that the Secretary of State's guarantee at the beginning of the 1986–87 financial year that £2·41 million would be given to Sefton through the recycling process be honoured? There may be a little more money. Surely those assurances enable local authorities to plan, knowing that they were guaranteed a certain sum. If that practice were continued, the Minister would not need to pinch money from local authorities.

Dr. Boyson: The hon. Gentleman will appreciate that I do not have the details about Sefton with me. Last year a commitment was made that at least £400 million—

The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): It was £450 million.

Dr. Boyson: It was £400 million at the beginning and shortly thereafter a further commitment was made. I am grateful for the help of my hon. Friend. The sum was increased up to £500 million and a press release was circulated.
Grant recycled in 1986–87 is likely to be £611 million, so, to answer the hon. Gentleman's question immediately, I cannot see that there would be any threat to the sum guaranteed to Sefton, depending on its expenditure. However, I shall certainly write to the hon. Gentleman about this. The amount from Government depends on the level of expenditure of a local authority. If a local authority has increased its expenditure greatly, obviously that will have an effect on the grant as the original grant will be reconsidered. Sefton, like every other local authority, will have its share of grant recycling.

Mr. John Heddle (Mid-Staffordshire): I should like to follow the point niade by the hon. Member for Bootle (Mr. Roberts). Will my hon. Friend confirm that if the House gives the Bill a Second Reading and it passes through all stages in Committee and the other place, it will have no effect on the rate support grant settlement for 1987–88 and that the rate support grant settlement for the coming financial year is well in advance of that for previous years—some 5·5 per cent.—for those local authorities that are not rate-capped, that is, well above the rate of inflation?

Dr. Boyson: I can give my hon. Friend the assurance that he seeks. The Bill deals simply with the question of recycling, not with the original distribution, which has already gone out. The end of recycling means that each local authority will have the grant that has been given to it, provided that it spends at the level of the settlement spending assumption. I can give that straightforward assurance.

Mr. Robin Squire: Does my hon. Friend agree that in general terms the position is similar to that in which, if the Ministry of Defence spent in line with its estimates for any year, it should expect some extra money at the end of the year? At present that is what is happening in local government and that is what the Minister is rightly trying to stop.

Dr. Boyson: I agree with my hon. Friend's definition. Without bringing in other Departments, I realise that that was a splendid illustration of what is happening and what the Bill is about.
To continue with what I was saying, the process continues periodically for some time after the grant year in question as new and better information about authorities' actual expenditure becomes available. As I have already said, that procedure has several disadvantages. The first and most important is that when local authorities set their budget they have no certainty as to whether they will have more money coming to them as the year goes on. Obviously, the right time to make firm decisions is at the beginning of the year when the distribution of their money between the various local departments should be made. Relatively large amounts of additional grant can subsequently appear or be lost purely as a result of an authority's spending elsewhere.

Dr. John Cunningham: I am listening carefully to what the Minister is saying. He should tell the House what has happened to the promises made by the right hon. Member for Mole Valley (Mr. Baker), who is now the Secretary of State for Education and Science. He told the House, particularly Conservative Members, that grant recycling would be used to help bring additional resources to low-spending shire authorities. What has happened to that promise? What has happened to the promise of the present Secretary of State for the Environment, who said that he was bringing an extra £800 million or £900 million in rate support grant for the coming financial year, because the Bill will reduce that amount by at least half? That is the intention of the Bill.

Dr. Boyson: The settlement that my right hon. Friend brought out in the summer is 9 per cent. higher than the previous year in Government grant; over £1 billion. No authority needs to lose one penny of that if it spends at settlement level. Settlement spending assumption is 1·5 per cent. higher than inflation. If the £400 million of this year was lost, it would mean that authorities throughout the country were spending at 8·5 per cent. above the previous year. If they lost £600 million this year they would be spending 11 per cent. higher, that is three times the rate of inflation. The hon. Member for Copeland (Dr. Cunningham) is a reasonable individual and he must be as shocked as I am to realise the level of expenditure that would be required to lose grant to that extent.
The hon. Member for Copeland's intervention gives me the opportunity to put on record the fact that if local


authorities spent only 0·5 per cent. higher than inflation, at the rate of 4·25 per cent., which is 1 per cent. less than the settlement presumed, they would gain an extra £132 million from the Treasury. The opportunity is present. It is not a game of football in which the intention is to score goals, or a procedure in which the way to get more money from the Treasury is to spend less. However, more money can be obtained by spending 0·5 per cent. over inflation.
I read what the hon. Member for Copeland said last year when this matter was debated. It is surprising, sometimes, how people change sides as time passes. We have all experienced that. On 20 January 1986 the hon. Member for Copeland said:
the local government finance system is now much more difficult to understand and predict than before".
I will not disagree with that. Indeed, we are trying to simplify matters and assist understanding throughout the House by introducing this measure. The hon. Member for Copeland went on:
The figures issued by the Government on the entitlements of indvidual authorities are misleading, because they ignore the 'close-ending' factor—".
Which is grant re-cycle—
The Secretary of State cleverly made seductive promises … about what their authorities might get. Does he suppose that responsible councils and treasurers can fix budgets and levy rates and precepts on what they might get out of close-ending? Of course not. He knows that that is a preposterous suggestion. He knows that no responsible local authority would dream of budgeting on that basis."—[Official Report, 20 January 1986; Vol. 90, c. 57.]
I rest the whole of the Bill on the comments that the hon. Member for Copeland made then. Indeed, his comments were very responsible.
I would like to continue—

Mr. Michael Meadowcroft: Good.

Dr. Boyson: I believe that it is a good thing to continue and I am glad that I have the support at least of the Liberal Benches. Indeed, perhaps the whole alliance may be joined in the desire for me to continue. There may be continuity there, if nowhere else.
As I have already said, these amounts cannot he anticipated and are quite outside an authority's control. Berkshire county council, for example, will this year receive about £39·3 million of block grant on our latest estimates. Of that, some £11·3 million will come from recycled grants—£10·3 million of which the council did not anticipate when it set its budget and rate for the current year.
Many local authorities have complained about the effects of that recycling, even though they stood to gain extra grant this year. Extra grants have been available to Nottinghamshire, Cheshire and many other authorities and these were not expected when the councils set their budgets. I can quote the example of one county council, Dorset, which sent us a long and detailed paper in June last year on the advantages of a new approach which would enable local authorities to calculate their grant with greater certainty and would produce a more direct relationship between an authority's spending decisions and its grant. The approach advocated was exactly along the lines which the Bill seeks to introduce. We have received similar letters from other authorities from which I could quote if there was time.
On the other hand, in 1985–86 for example, initial grant claims exceeded the amount available by £123 million. Therefore, £123 million had to be clawed back from all

authorities' entitlements. Clearly that creates quite unacceptable uncertainty for local authorities. A further disadvantage of the present system, of particular concern to the Government, is the fact that any grant recycled when there is an underclaim, is distributed both to high and low spending authorities. Authorities which choose to penalise themselves by spending up, and which lose grant as a consequence, can paradoxically receive back large amounts of windfall grant, regaining on the swings what they quite justifiably lost on the roundabouts.
All that sounds like something from "Alice in Wonderland". Indeed, it brings to mind a piece of nonsense verse by Lewis Carroll which might have been written to describe grant recycling:
I gave her one, they gave him two
You gave us three or more;
They all returned from him to you,
Though they were mine before.
Basically, that is what recycling is about.
That, then, is how the system works and why it needs to be changed. My right hon. Friend the Secretary of State announced his proposals to abolish grant re-cycling in July last year. Measures to implement them were foreshadowed in Her Majesty's Gracious Speech at the beginning of this Session and the intention to legislate was confirmed in the House on 13 January when my right hon. Friend announced his firm intentions for next year's rate support. grant settlement.
The Bill is, I am sure hon. Members will agree, admirably short, comprising just three clauses.

Mr. Allan Roberts: If the Minister is concerned that the present re-cycling system takes money from his so-called overspenders, does not give it to underspenders but distributes the money to all local authorities whether they over or under spend, why does he not introduce a new system which does what he wants—takes from the so-called overspenders and gives it to the underspenders instead of taking it from everyone and giving it to the Treasury?

Dr. Boyson: It is not taken from everyone; it is just taken from those authorities which overspend when compared with the assumption. Consideration was given by the Government to the suggestion made by the hon. Member for Bootle (Mr. Roberts). The disadvantage of his suggestion is that an authority may be spending a lot of money yet an assessment is made on its support grant allocation and that authority may receive money back. Another authority, which is not spending much at all, may not be rewarded because it is assessed against its record in recent years. The difference between authorities' expenditure is considered in recent years. Thus there will be rewards for authorities which do not deserve them under that method.

Mr. Tim Rathbone: Unfortunately, there is another side to that coin. There are authorities that have been particularly frugal in their expenditure over many years, and which, when there was rate-capping and recycling, were able to recoup some of the grants that they would have received and the support for their low levels of expenditure. That redistribution has been removed and my authority in east Sussex, which has been praised by my hon. Friend's Department year by year, and which has been promised action year after year to correct its balance of expenditure, has this year—not uniquely but as one


of very few authorities—had its available cash reduced. There will be no extra funds available later in the year. That problem exists, but the Bill does not tackle it.

Dr. Boyson: There are two points in my hon. Friend's intervention. My hon. Friend's points relate to the method of distribution. The basic problem is not recycling or no recycling for some authorities. Rather, the basic problem lies in the way in which the rate support grant is distributed. Because of our suspicion of the way in which the system works at the moment and the disadvantage of the domestic rating and business rating systems, we have suggested that, in the first Session of the next Parliament, we will introduce legislation to change the system.
I accept that within the system there have been advantages to such authorities as Sussex, part of which my hon. Friend the Member for Lewes (Mr. Rathbone) has the honour to represent. Last summer my right hon. Friend the Secretary of State gained an excellent settlement of an extra £1 billion of real money—an increase of 9 per cent—for distribution. More money was put in. However, my hon. Friend's objection relates to the method of distribution. The extra money was only a stop-gap help. There must be a change in the system to help the shires. That will be far more satisfactory in the long run.
The Bill, as hon. Members will agree and as I have already said, is honourably short as it comprises just three clauses. Clause 1 contains the meat of the Bill. It enables the Secretary of State to end the practice of grant recycling by requiring him not to be concerned to distribute the amount of block grant estimated to be available in any previous report. Instead, he may vary the amount of grant payable in any subsequent report. It also enables the Secretary of State to leave out of account new information about authorities' actual or likely total expenditure if he needs, for whatever reason, to determine new principles for grant-related poundages in the supplementary report.
In addition, clause 1 ensures that the Secretary of State can make such assumptions as he considers appropriate about authorities' total expenditure when he sets the poundage schedule in a rate support grant report.

Mr. Michael Hancock: Will the Minister give an interpretation of some of the words in the Bill? Last week, when we were discussing the previous Local Government Bill, he said that the interpretation of words was important. What is his interpretation of clause 1(b)(ii)? That can be misinterpreted easily, and I should like, this afternoon, for its meaning to be read in to the record, so that everybody is clear that the Minister knows exactly what it means, and we can then go into Committee bearing in mind what he has said.

Dr. Boyson: I look forward to dealing with this important clause in Committee in great detail. Clause 1(b)(ii) is the centre of the Bill. Previously, every time there was a supplementary report, the Secretary of State had to bring all local authorities into line so that the sum going in grant had to be the same as what was previously determined. In this case, there is no such determination. The same £12 billion is going in grant this year. If the authorities overspend, that amount in full will not go out. On the other hand, if authorities underspend, a greater amount will go from the Treasury. Without this, the

Secretary of State would have to bring all local authorities into balance in total expenditure, so that every time one local authority over or underspent, it would affect every other local authority.

Mr. Hancock: Does that mean that every local authority will be treated the same and the availability for grant will be the same for all local authorities? The clause could be interpreted to read that that was not the case.

Dr. Boyson: I hope that I am informing the hon. Gentleman correctly. The rate support grant statement, made by my right hon. Friend the Secretary of State, set out the sum of grant to each authority and presumed a 5·25 per cent. expenditure increase. The difference of grant to each authority will depend on whether it has spent over, below or at the presumed level. I am grateful to the hon. Gentleman for drawing my attention to this, because this is the kernel of the Bill.
Clause 2 contains a rather technical provision which, though incidental to the abolition of grant recycling, is necessary to ensure the smooth operation of the modified scheme by removing a possible doubt in the existing legislation. This is in the use of the words "the appropriate class" which appear several times in the 1980 Act in describing different types of authority, but which our legal advice suggests may be susceptible to different interpretations in different parts of the Act. Our intention in this clause is to ensure consistency of interpretation, and to clarify that the Secretary of State's ability to consider different types of authority separately when setting the mechanisms for rate support grant reports applies in the same way throughout.
The third and final clause of the Bill, which is the most simple, provides that the Bill shall apply to England and Wales only.
Having seen reports in one newspaper today, I should like to put at rest suspicions about what clauses 1 and 2 are about. We can all agree on clause 3. We are not seeking to validate any actions that were taken on the distribution of grant in London following the abolition of the GLC. Nothing in the Bill does that. The Bill has no bearing on the Greenwich case, which concerns the so-called Bromley error. The definition of classes of authority has no bearing on this. The Bill removes doubt about the precise meaning of part 6 of the Local Government, Planning and Land Act 1980, as amended by the Rate Support Grant Act 1986. We use this to set grant-related expenditure and grant-related schedules on spending and GRE. We need this to be correct to ensure that we can distribute extra block grant to educational authorities, and not all local authorities, following the Government agreed teachers' pay settlement. The Bill does not seek validatory action by my right hon. Friend the Secretary of State.
In practice, the Bill ensures that the grant-related poundage schedule determined in the rate support grant report to distribute the amount of block grant then available will not be redetermined to take account of the spending decisions of individual authorities. In consequence, any grant not claimed because authorities overall spend more than the settlement will not be paid out. If, overall, authorities claim more grant by spending less, additional grant will be provided subsequently by the Exchequer.
That the abolition of grant recycling will bring greater certainty and stability to authorities' block grants is, I


believe generally acknowledged. Many local authority members and officials who have written or come to see my colleagues and I in the course of our consultations on next year's rate support grant have recognised this. The Association of County Councils, the Welsh Counties Committee and the Association of District Councils have welcomes the principle of our proposals, although naturally they and many of the individual authorities who have commented qualify this by wishing that more grant could be made available or that the settlement spending assumption were higher. However, I remind the House that the rate suport grant settlement which my right hon. Friend has announced for 1987–88 is an extremely generous one. It represents an increase of more than £1 billion—or over 9 per cent.—in the total amount of Exchequer grant available to local authorities in England next year—a substantial real terms increase.
Labour Members will probably seek to suggest, as they have done in the past, that the abolition of grant recycling will automatically wipe out part of this increase. That has already been said. This is not true. There is nothing automatic about it. If authorities can restrain their spending increase next year to the settlement assumption—which in England is 5·25 per cent.—in current terms, rate-limited authorities excepted, which is well above the expected level of inflation of 3·75 per cent., they will be able to claim in full the extra block grant made available. I hope they do so.
However, if some authorities choose to increase spending beyond this assumed level, they will lose grant, as is the case now. The difference under the provisions in this Bill is that they can no longer hope to regain some of this grant through recycling. This is a positive benefit of this Bill.
The Bill will put an end to grant recycling and the uncertainties and illogicalities that go with it. In future, local authorities will have much greater certainty as to their grant entitlements. They will know their entitlement for a given level of spending at the time of the settlement, and will be able to calculate what their grant would be for any other level of spending in the knowledge that other authorities' decisions will no longer he able subsequently to change the whole picture. Unlooked-for sums of grant will no longer wash into authorities' accounts long after their rates for the year have been set. Neither will the Government take away grant in order to pay for some sudden increase in another authority's entitlement. An authority's grant will, from now on, if the Bill becomes law, depend on its own spending decision alone, which can only help to improve its accountability to the ratepayer.
The Bill will encourage sensible, responsible and properly planned budgeting by local authorities. I commend it to the House.

Mr. John Fraser: On 16 January 1985, a former Secretary of State for the Environment, who was not then, and is not now, a Secretary of State for the Environment, described the debates on local government finance as
occasions when the disgruntled speak to the disenchanted in front of the disbelieving.
He went on to describe the rate support system as:
understood only by the initiated … byzantine in its complexity … fully comprehended only by those who have a taste for scholastic theology".—[Official Report, 16 January 1985; Vol. 71, c. 413.]

Two weeks ago, during the debate on the Local Government Finance Bill the hon. Member for Ealing, Acton (Sir G. Young), who is also no longer a local government Minister, said that the more the local government finance system was explained to him the less he understood it. This week the Local Government Finance Bill is in another place. It is intended to give retrospective cover to a series of illegal acts committed by a series of four former Secretaries of State for the Environment. That Bill will also remove the legal challenge in the courts to the past exercise of powers by the Secretary of State.
The Bill before us today adds another chapter to the byzantine saga. Like last week's Bill, this Bill has retrospective effect under clause 2. The Minister said that it was not retrospective, but of course it is because it seeks retrospectively to validate past acts. I shall go into that in more detail later. Clause 2 is certainly retrospective. This Bill, together with last week's, removes the challenge in the courts to past rate support grant decisions and introduces new and wide discretions. It is a further part of the tangled mess of the Government's creation.
This Bill like last week's and like the ones we had last year and two years before that, are all developments of the rate support grant system introduced in 1980 by the right hon. Member for Henley (Mr. Heseltine) who, like the others I have mentioned, is no longer a Minister. The right hon. Gentleman gave a broad description of the system in 1980. After listening to the Government's assurances, it is as well to go back and look at how the present system, which is being slightly amended, was described then.
The then Secretary of State, the right hon Member for Henley, announcing the new block grant system, said:
The new system in no way sets limits to what an authority spends".
That is no longer true, is it? He said:
nor does it fix the level of an authority's rates.
That is no longer true, is it? He went on:
Those decisions remain with the authority.
That is no longer true. He went on to say:
No cash is actually removed from an authority,"—[Official Report, 5 February 1980; Vol. 978 c. 251–2.]
That is no longer true either, is it? We must look back to the assurances that were given when the sytem was introduced and listen also to the assurances given about last week's Bill and about this week's Bill. We must remind ourselves that this is the 42nd legislative skirmish between the Government and local councils since 1979.
This Bill is only three clauses long and is therefore admirably short, but it is another milestone along the road of muddle and misanthropy, incompetence and illegality, and sometimes plain malevolence, in the administration of the rate support grant system. 'We have had change after change, penalty after penalty and retrospection after retrospection. It is like the films produced by Sylvester Stallone, the "Rocky" series. Every film has a sequel, although even Sylvester Stallone never got anywhere near the number of sequels being produced by the Government.
To paraphrase and depart only slightly from the wording of the Bill, it will enable the Secretary of State to do as he thinks fit. That is the context in which the Bill is presented, and so far that is a charitable view of the legislation. The financial memorandum could hardly be more obscure. I cannot remember looking at the memorandum on a previous Bill and finding out from something which is supposed to be informative that the Bill may cause more or less money to be spent. That is the


least informative piece of information that I have ever seen in a financial memorandum. It is so obscure that it is quite clear that more money could be spent. However, given the Government's record, that is unlikely.
We are talking not about a theoretical world in which local authorities spend only 0·5 per cent. above the rate of inflation, but about the real world in which on the best estimates there will be a loss to local councils, and that means a loss to ratepayers. On one low estimate the loss will be £2 billion to £3 billion. On a higher estimate it will mean a loss to ratepayers and councils of £1,000 million. Those are not exaggerated figures because, as the Minister said, the amount of grant recycled in the current year was £611 million. The Bill has huge financial consequences for local authorities and diminishes the increase in support for local authorities that was promised only last year.
I listened carefully to the Minister because I thought he might invalidate many of the things that I was proposing to say. He said that the recycling system is complicated and creates uncertainty. We knew he would say that because it is in the explanatory memorandum. But he might have said that there is another way of distributing this money with a greater degree of certainty under a different but fair and equitable system for local authorities. Almost everything he said pointed the way to large amounts of this money going back to the Treasury.
The Minister gave his own description of how the present recycling system works. I shall try to give my version of that because local government finance is not as byzantine as some people make out. At present, the rate support grant goes from the taxpayers via the Treasury to local councils. As the Minister said, it is calculated as a fixed global sum which is shared among local councils according to Government assessments, not councils' assessments, of their needs. To some extent it takes into account previous spending records. To say the least, it is a somewhat odd system, because if a local elected council assesses the needs of its electorate as being much greater than the Government's assessment, it is rate-capped, or its grant is withdrawn or, at worst, it suffers both.
If a council disagrees with the Government over the assessment it will be hammered and receive less money. That is a somewhat odd system, but it gets odder. If a council agrees with the Government's assessment of its needs as set out in the grant-related expenditure assessment and tries substantially to move up to the Government's assessment of its needs, it still gets punished—certainly it will not be rewarded.
There is a third aspect of this odd and curious system. If a council disagrees with the Government's assessment of its needs and thinks that the Government have assessed that need as too great, and if the council spends below the Government's assessment of need, it gets some reward. That is the rate support grant system introduced in 1980. Since that system was introduced, the global sum has been allocated to local authorities collectively. Money has been withheld from councils that overspend according to the Government's estimates and, as the Minister explained, that pool of money is redistributed. As well as doing other things, clause 1 enables that money to be seized back by the Treasury instead of being shared by the beneficiaries for whom it was intended.
At present, the system is akin to a tote or a pool in which, even if the odds or the shares are changed, the total

distribution will still go to those who are entitled to share in the pool. At least the system has that certainty. The new system that clause 1 introduces allows the Department of the Environment to fiddle the odds. I quote the word "fiddle" from a speech on the rate support grant by the hon. Member for Tiverton (Mr. Maxwell-Hyslop) about a year ago. Under the new system, the Department of the Environment can fiddle the odds and can change the shares rather like the promoter of a lottery or a bookie who puts his hand into the pool and takes some of the punters' money. As I said, the amounts involved are enormous.
If London authorities generally overspend in the forthcoming year by 3 per cent., leakage from the pool will be £112 million in 1987–88. That leakage will be three times greater than the total amount of urban aid given to London local authorities in the forthcoming year as partnership aid, programme aid and other urban assistance. If shire counties overspend—that is the DOE definition of overspend—by an average of 3 per cent. the loss from the pool to the shire counties will be £193 million, and that will wipe out in aggregate all the cash gains that the Minister claims for the current rate support grant settlement. All the cosy consultations between the Secretary of State and Back-Bench Tory MPs will come to nothing.
The same objection is made by the Association of County Councils. They say that, of course, they should like to see clarity and certainty. It says:
It was made clear, however, that such support—
that is, for this new system—
was only on the basis that an adequate spending assumption which properly reflects local authorities' spending was used in any RSG Settlement.
This is the crucial part of clause 1. It goes on to say:
This would ensure that the full grant pool would be distributed and avoid the unexpected results for 1987–88 whereby it is estimated that some £400m of grant will be returned to the Treasury.
It goes on to state:
Since the Association does not regard the assumed spending underlying the 1987–88 Settlement as adequate, nor have any assurances been received for the future, then the total abolition of block grant recycling must be opposed at this time.
The potential losses, even on a 3 per cent. overspend basis, could wipe out all the gains that the authorities are likely to receive.
The figure of 3 per cent., which is a modest one, is not a far-fetched forecast. In the 30 January edition of the Local Government Chronicle, I saw the recommended or approved precepts for a number of English counties. They are not loony Left councils—I do not think that there are any loony Left councils—but Left councils that care. Whatever the argument, the councils that I shall mention are not loony Left—some of them are not even Left or centre.
North Yorkshire plans to increase its spending next year by 10·9 per cent. That is well above my 3 per cent. figure. Oxfordshire—the Minister for Housing, Urban Affairs and Construction, who represents a constituency in Oxfordshire, has departed from the Chamber after his bashing at Question Time—is budgeting for an increase of 15·8 per cent. Somerset is budgeting for an increase of 7·8 per cent. Surrey—no militants are in command in Surrey—is budgeting for a 7·44 per cent. increase in its precept, and Wiltshire is budgeting for an increase of 9·9


per cent. A series of Conservative or middle-of-the-road authorities plan to bring about the grant loss that I put forward.
On Government assumptions, if all local authorities overspend by more than 3 per cent., the loss will be over £400 million. To put that sum in context, that is £70 million greater than the Government expend on arts, libraries and museums. It is close to the total amount that the Department of Environment provides for housing subsidies for local authorities with great housing needs. It is a large loss indeed. I shall translate the recycling loss for individual authorities and give the House some figures. Taking this year's figures as representative, Essex would lose £19 million. Hampshire—I am sure that this is of interest to the Under-Secretary of State for the Environment, the hon. Member for Southampton, Itchen (Mr. Chope)—would lose £17 million, and Birmingham would lose £15 million.
I also have figures for some London boroughs. Bearing in mind the Government's interest in law and order, the Metropolitan police will lose £11 million with this system. Hard-pressed boroughs such as Hackney would lose £0·8 million, Islington would lose £1·1 million, and Lambeth— my borough—Southwark and Wandsworth would lose £1·3 million. It is interesting to look at the hard-pressed borough that the Minister represents. On these assumptions, as a result of what he is doing, the borough, of which his constituency forms one third, would lose £3 million. Newham would lose £2 million. I am talking not about inconsequential sums but in some cases about substantial losses, to shires that have been promised a little more as a result of the recycling and, in other cases, money that will go to hard-pressed boroughs that, whatever the circumstances, can do with a little extra assistance.

Mr. Laurie Pavitt: My hon. Friend mentioned my borough, Brent, whose representation I share with the Minister. In spite of the Conservative's efforts to keep down rates at all costs, we were left with large bills. The loss of the £3 million will be disastrous because of the legacy that we received from the previous Conservative administration.

Mr. Fraser: I am grateful for my hon. Friend's intervention.
I used the word "overspend" because we are talking about Government assumptions. The word assumptions is important. Clause 1 allows the Secretary of State to make virtually whatever assumptions he may with very little chance of court challenge. We are talking about assumptions such as that the homeless do not need to be housed. This afternoon we heard the assumption by the Secretary of State that it is sufficient for the homeless to be put into hostels and bed and breakfast accommodation. I know of children who have begun to eat insects as a result of their stay in bed and breakfast accommodation. Those are the assumptions about which we talk—assumptions that the cold do not need to be warm, that the jobless do not need to be provided with jobs, or that adult illiterates do not need evening classes where they may be assisted and taught to read. The Government are taking power to make even more assumptions with less likelihood of challenge.
The Minister said that the Bill has the advantage that it removes uncertainty. First, borough and county treasurers are a lot more cunning, canny and clever than they are given credit for. It may be a byzantine system but

they do not find it too difficult to operate and to forecast within it. It does not worry the finance officers or the local officer's authorities that, as a result of the recycling system, they, like the London borough of Brent, may receive an extra £3 million that was not covenanted for. Brent and any other hard-pressed borough do not mind that type of uncertainty.
If the Minister were running the premium bonds system, he could remove the uncertainty by abolishing the prizes. That is the sort of system that he brings forward. A few boroughs worry about the bonuses that they get from the recycling system. The argument about certainty will not wash with any authorities. According to experience, the Department and the Treasury will be tempted to deflate local authority expenditure again. That is why all sides of the House ought to have misgivings about the Bill.
Clause 1(3) is highly objectionable. It enables the Secretary of State to discriminate against a single authority. The subsection provides for different assumptions to be made about different authorities. According to the Association of County Councils, that gives the Department the power to victimise an individual local authority. That power does not exist now. I, too, believe that clause 1(3) is obnoxious and I hope that it will be deleted.
Clause 1(3) also gives the power for the first time to create new descriptions of authorities within existing classes without parliamentary approval. Under clause 1(3) it is perfectly possible to distinguish between inner London and outer London boroughs. That power is expressly preserved by a later provision. Theoretically, it would enable the Secretary of State to discriminate between the north and the south, inner and outer districts of urban areas, hung and unhung local authorities and Conservative and Labour authorities. There is no limit to the discrimination that could be exercised under clause 1(3) and it is highly objectionable.
Clause 2 is retrospective and validates discrimination between inner and outer London boroughs. Retrospectively, it may validate favouring Bromley at the expense of a borough like Hackney. Because of clause 4(6) of the Local Government Finance Bill, which is in another place, that cannot be legally challenged. I disagree with the Minister's interpretation of the interaction between these two pieces of legislation. I hope that the other place will ensure that the judge-proofing provisions in the Local Government Finance Bill will spill over into this Bill and that it will look again at the removal of the challenge in the courts to past decisions in relation to London local authority expenditure.
This is a tiny Bill, but small errors can be costly. The amount of money involved is as much as £1 billion The Bill lets the bookie welsh on the punters' funds and then renders him immune from prosecution in the courts. It is a breach of promise to low-spending authorities and a grave disappointment to those that spend more highly, according to their assessment of need. The Bill deeply disturbs local authorities and their associations, of every colour. It results in the massive loss of rate support grant to the Treasury and is a kind of financial three card trick, similar to the trickery of the figures in the housing investment programme. We hope that the House will agree that the Bill ought not to be given a Second Reading.

Mr. John Heddle (Mid-Staffordshire): I begin by declaring an interest that I have not declared before in the House. I failed O-level maths not once, not twice, but three times. I am quite sure that I join many of my hon. Friends, many Opposition Members and most of my constituents when I say that I do not understand the algebraic formula or the mathematical ramifications of local government finance. Although I may be light on technical ability, I hope that I am not so light on common sense.
In principle, I welcome the Bill. It seeks to streamline an almost incomprehensible system, for the time being, until the party that sits on this side of the Chamber is returned to office at the next general election to enable it thoroughly to overhaul and restructure, on a fairer and a more common-sense basis, the whole system of local government finance.
This Second Reading debate also affords the House an opportunity to dwell on the reservations that some of the local authority associations have expressed. The hon. Member for Norwood (Mr. Fraser) referred to the reservations of the Association of County Councils. I agree with him about some of those reservations, and I shall dwell on them in a little more detail in a moment.
The debate also provides us with an opportunity to put under the parliamentary microscope the attitudes, behaviour and antics of certain local authorities—the so-called high spenders and profligate authorities—that this Bill, if it becomes an Act, in the not-too-distant future will stop. It is those authorities—

Mr. Eric S. Heffer: Which ones?

Mr. Heddle: I refer to those authorities that are controlled by the hon. Gentleman's party, particularly those in inner London.

Mr. Heffer: What about Liverpool?—

Mr. Heddle: Liverpool is quite another matter.

Mr. Heffer: Exactly. I thank the hon. Gentleman.

Mr. Heddle: It managed to escape the microscope of the Audit Commission, but it has not escaped the attention of the media, or of industry or commerce. The reason why there is so much unemployment in the hon. Gentleman's constituency and the city of Liverpool is largely the antics of Liverpool city council, high rates and the profligate and wasteful spending of taxpayers' and ratepayers' money.

Mr. Allan Roberts: Will the hon. Gentleman give way?

Mr. Heddle: That authority is denying industry and commerce the opportunity to create wealth and therefore to provide jobs for the constituents of the hon. Member for Liverpool, Walton (Mr. Heffer) and also for the constituents of the hon. Member for Bootle (Mr. Roberts), to whom I now give way.

Mr. Roberts: I am pleased about that, because the hon. Gentleman is under the illusion that I represent a Liverpool constituency. I do not. I represent a Sefton constituency, one of the lowest rated metropolitan districts in the country. It has been Tory-controlled since 1974 when it was established, and it has a 30 per cent. unemployment rate, which is as high as the unemployment rate in the constituency of my hon. Friend the Member for Walton. Is the unemployment rate in my constituency the result of the antics of the Sefton Tory council and of its leader Ron Watson?

Mr. Heffer: rose—

Mr. Heddle: I shall be happy to give way to the hon. Member for Walton.

Mr. Heffer: The hon. Gentleman is talking rubbish. In the last three years we have built 3,000 houses in Liverpool and we have taken workers off the dole. The members of my union, the Union of Construction, Allied Trades and Technicians and the Transport and General Workers Union have built those houses. We are building sports centres. We have also built a park in the centre of Liverpool, where there was never a park before. We have not indulged in what may be criticised in other parts of the country as profligate spending. We have been doing a good job for the people of Liverpool. However, the Government withheld the support that Liverpool required to carry out its programme. The responsibility for what has happened in Liverpool has to be laid at the Government's door. The local authority has carried out the programme upon which it was elected. That is not profligacy.

Mr. Heddle: For the 3,000 new houses that the hon. Gentleman reminded us his union has helped to build, probably 4,000 or 5,000 houses owned by Liverpool city council are lying empty and derelict and attracting vandals and they have been empty for four, five, six, or 12 months or more.

Mr. Heifer: Those are multi-storey dwellings that ought to have been pulled down years ago.

Mr. Heddle: If he were allowed by you, Mr. Deputy Speaker, to continue, the hon. Member for Walton, who makes that intervention from a sedentary position, would remind the House that many multi-storey flats in Liverpool and around that once great city have now, in a partnership between the private and the public sectors, been made habitable and suitable for his constituents and others to occupy.
I shall not dwell further on the problems of Liverpool, but subsequently I shall refer to the problems of the eight inner London authorities that are highlighted in the Audit Commission's recent report. I welcome the Bill because, as my hon. Friend the Minister for Local Government said, it will end uncertainty and instability. It will stop grants from being recycled indiscriminately to the high-spending authorities.
The hon. Member for Norwood suggested to my hon. Friend the Minister that if he were in charge of the premium bond system he would cancel the prizes. The difference between the premium bond system and the rate support grant system is that the premium bond holder—whoever he or she is—stands an equal chance of winning. Under the rate support grant system, high spenders and irresponsible councils enjoy the prizes. Under the Bill the prudent local authorities—controlled by both major parties in the past, but now controlled more by the Conservative party—are more likely to get the prizes.

Mr. John Fraser: I understand that there is a genuine difference of opinion between hon. Members as to where the money available for recycling should be recycled. But surely we can have an agreement between Conservative Back Benchers and the Opposition that whatever is


available for recycling should go to the local authorities not to the Treasury. If an appropriate amendment to that effect is tabled, will the hon. Gentleman support it?

Mr. Heddle: I am sorry to disappoint the hon. Gentleman. I agree with the theory that he has just put forward, but I do not agree with the practice. More and more of Liverpool taxpayers' and ratepayers' money has been spent on trying to revitalise Liverpool through derelict land grants and urban development grants, as well as a raft of initiatives introduced by the Government since they were elected in 1979, but, unfortunately, it has not cured the problem. The reason is that the local authorities in Liverpool and on Merseyside have not invested the taxpayers' and ratepayers' money in the most cost-effective and job-creative manner.
My concern about the system of local government finance is not the amount of money that is in the pool, although I agree with the hon. Member for Norwood that the more money there is in the pool the more likely it is to be invested wisely. Enabling the Treasury to recycle the money through the rate support grant system will not necessarily produce a more cost-effective system. The reason for that has already been given by my hon. Friend the Minister in answer to interventions. The rate support grant settlement for 1987–88 is £1 billion more than last year, a 9 per cent, increase on previous years. For all the local authorities that are not rate-capped that will mean a 5·5 per cent., increase in grants which is some 2·5 per cent, above the prevailing rate of inflation. To answer the hon. Member for Norwood, more money is coming from the Treasury, which is due to the Government's overall management of the economy.
I shall turn to the points made by the Association of County Councils. The hon. Member for Norwood referred to the ACC's general objection to the Bill. The hon. Gentleman quoted page 2 of a letter that he received from the ACC today:
Since the Association does not regard the issue of spending underlying the 1987–88 settlement as adequate, nor have any assurances been received for the future, then the total abolition of block grant recycling must be opposed this time.
Clearly, there is a difference of opinion between the Government and the ACC as to the adequacy of the money available within the system. As my hon. Friend the Minister said, there is £1 billion more available in the system this year than in previous years.
The letter from the ACC highlights the association's three other reservations, which no doubt are shared by the other local authority associations. These matters, however, can be dealt with in Committee. The letter says:
The Bill as framed would not give a future Secretary of State for the Environment any discretion to re-introduce the operation of flowback without other further primary legislation.
In the association's view that is unnecessarily restrictive. The letter continues:
The Bill makes no provision for the Secretary of State to be required to consult the local authority associations who represent them on various aspects of the proposals.
In the opinion of the ACC, that omission should be rectified, but that is not a particularly significant point. The association's final point is about the powers granted to the Secretary of State to make different assumptions for the different authorities in clause 1(3).
The ACC says:
This is a change from previous practice whereby any assumption would only be applicable to classes of authority,

thereby preventing the victimisation of individual authorities. The Association of County Councils is concerned at the potential for the proposed change to be used for a wider purpose than is presently intended, which is to deal with the issue of rate-cap authorities. It is suggested that a more precise definition could be found rather than the rather wide wording presently proposed".
I suspect that my hon. Friend the Minister will agree— between the House giving the Bill a Second reading and a Standing Committee being convened—that that matter can be accommodated in Committee within the framework of the Bill.
The purpose of the Bill is to deny those high-spending and irresponsible authorities which seek, for their own narrow party political advantage—dare I say mongrel dogma—to fly in the face of central Government and try every trick in the creative accountants' book to cause distress to the ratepayers by pursuing narrow party political ends. At this point I believe that my right hon. Friend's proposals are correct. Let us look at the eight inner London authorities that captured the attention of the Audit Commission. Brent is £2·6 million overspent—

Mr. John Fraser: It would be helpful if the hon. Gentleman would tell us where we can obtain a copy of the report, because I have been unable to obtain one so far.

Mr. Heddle: No doubt the hon. Gentleman has his own sources—the national press, radio and television. I recall sharing a microphone with the hon. Member for Blackburn (Mr. Straw)— one of the hon. Gentleman's Front-Bench colleagues—on the BBC World Service last Thursday, and he was certainly adequately briefed. The arguments that he put forward to the world at large were not convincing, but he convinced me that he had considerable knowledge of what the Audit Commission's recommendations were.

Mr. Heffer: I tried on a green form to obtain a copy of the recommendations before the debate so that I would know exactly what was being said, but I did not obtain a copy. That is disgraceful. A document is being quoted, but when we as Members of Parliament tried to obtain a copy we were unsuccessful. In the old days—I do not know whether the Government have had anything to do with this—these documents were made available. Now one has to put a green form in to obtain one, but I still could not get one in time for today's debate. That is a disgrace.

Mr. Heddle: I shall leave the hon. Member for Liverpool, Walton to discuss the matter with the hon. Member for Blackburn, who clearly has had the opportunity of putting in either a green card, a yellow card or possibly a gold card and has certainly obtained a copy of the Audit Commission's recommendations.
If recycling were to occur and the Bill were not to be passed by the House, Brent would receive £2·6 million more; Hackney £750,000 more; Haringey £1·6 million more; Islington ?1 million more; Lambeth £1·2 million more; Lewisham ?750,000 more and Southwark £1·12 million more. Let us look at those authorities through the eyes of the Audit Commission. I shall quote what the Audit Commission says about those high-spending authorities that would benefit from recycling. It refers to housing as a "catalogue of despair" and states:
voids, staffing and other costs are 70 per cent, higher than might reasonably be expected, and arrears nearly three times good practice levels".
The Commission states:


none of the authorities appears to be spending per dwelling as much on maintenance as Tower Hamlets, Wandsworth and Westminster"—
authorities with similar inner-city housing problems. The Audit Commission says that in the eight boroughs
the cost of refuse collection was at least 20 per cent, more than it need have been, given local policies and conditions outside the authorities' control".
The Audit Commission's view on these high-spending authorities was that inefficiency and mismanagement were rife and that these local authorities were trying to fly in the face of the prudence practised by the Government. If the Bill does nothing else but deny those local authorities the opportunity to have the money which should go back to the better benefit of the wider public—the ratepayer and the taxpayer—it should receive the wide support of the House.

Mr. Michael Hancock: We can all rehearse the arguments about high-spending authorities, but will the hon. Gentleman explain the particular problems with Hampshire, East Sussex, West Sussex, Dorset, Kent and Surrey, which will all suffer? What have they done wrong? They are interested to know what they have done wrong and why they should be punished by the Bill. Will the hon. Gentleman explain how his local authority will benefit from the Bill?

Mr. Heddle: No doubt the hon. Gentleman will have the opportunity to catch your eye later, Mr. Deputy Speaker, to speak specifically about Hampshire. I served my local government apprenticeship on Kent council and am proud to have done so. The council certainly has not lobbied me. I suspect that none of my hon. Friends who represent Kent constituencies and who are not in the Chamber have a particular gripe about the Bill. There seem to be no problems with Staffordshire, which is controlled by the Labour party. Apart from a rather wild faction in Stoke-on-Trent, which is becoming wilder by the minute, Staffordshire county council manages its affairs not unreasonably because basically it has a good dialogue with my hon. Friends and me, who represent the eight constituencies in the southern and middle part of the area.

Mr. Pavitt: Will the hon. Gentleman give way?

Mr. Heddle: The hon. Gentleman has intervened once already. With respect, I should like to conclude to enable other hon. Members to catch your eye, Mr. Deputy Speaker.
I am particularly attracted to the comments of my right hon. Friend the Secretary of State, who, in July, said:
authorities will be able to plan their budgets and rates with much greater assurance. Their grant entitlement will depend solely on their own expenditure decisions. It also means a tougher regime for high spenders. They will continue to lose grant if they overspend, but will not then gain on the roundabouts, by getting recycled grant, part of what they lost on the swings."—[Official Report, 22 July 1986; Vol. 102, c. 182.]

Mr. Alfred Morris: I was glad to see the Secretary of State for the Environment on the Treasury Bench, even as a casual visitor to our debate. He cuts a more than slightly ludicrous figure in trying to masquerade as a friend of good local government. The plain truth is that many of the very best people in local

government insist that they are now being forced to choose, not only which of their discretionary powers to use, but even which of their legal duties to fulfil.
That is now spectacularly true, in an increasing number of localities, of the legal duties imposed by section 2 of the Chronically Sick and Disabled Persons Act 1970, which is about making life better, or at least bearable, for Britain's 5·5 million disabled people. It is an Act, as the House knows, which I piloted to the statute book and, not unnaturally, I take a very close interest in its implementation. By common consent, the Act is not now being applied as the House intended and some of the worst offenders are those in local government on whom the Secretary of State lavishes most praise.
The right hon. Gentleman is clearly highly pleased at the £500 million that he will be taking from local authorities by ending grant recycling. No doubt he believes that he will be hurting those fantasy monsters which people his nightmares and stalk the pages of much of the press. These so-called ogres of the Left appear very different to the people whom they serve. My purpose in intervening in the debate is to make the Secretary of State listen to those who will really be hurt by his policies. They are not the council leaders, about whom the right hon. Gentleman is so obsessed. They are people with severe disabilities seeking to establish themselves in homes of their own, not least people with mental illness discharged after many years in hospital who find they have nowhere to live.
I am not sure whether the Secretary of State reads The Guardian, but I hope that at least he read the letters published on 2 February in reply to the complacent article by the Minister for Housing, Urban Affairs and Construction. If not, he should now urgently read the letter from three doctors at King's College hospital, in which they describe how a homeless, mentally ill man of 32 recently developed severe frostbite and had to have both his legs amputated. It is people like that man, among others, for whom I want to speak briefly in this debate.
The Department of Health and Social Security has been weak enough over the past seven years in fighting for people with disabilities, but it at least knows what is needed. It knows that local authorities are the only bodies that can nationally provide the care that such people need, but at times DHSS Ministers might just as well be sitting on the Back Benches for all the influence they seem to have, either with the Secretary of State or with the Treasury.
In recent weeks DHSS Ministers have been congratulating themselves on an extra £27 million which they claim to be providing for community care in 1987–88. But what use is £27 million if the Secretary of State then takes back £500 million? How can local authorities possibly provide community care for physically disabled people, for people with mental handicaps or for those suffering from mental illness in these circumstances? How can they, especially in those parts of London that will particularly suffer at the right hon. Gentleman's hands, care for the additional hundreds of people dying of AIDS who want to spend the remainder of their lives in their own homes?
The hon. Member for Mid-Staffordshire (Mr. Heddle) referred to the Audit Commission. Let me remind the House that on page 34 of its report "Making a Reality of Community Care" the Audit Commission states:


Virtually till authorities that provide social services lose grant if they increase spending in real terms.
It continues:
Hence, the system used to control expenditure can penalise local ratepayers in authorities implementing Government policy and saving money for the NHS into the bargain. Thus in one authority visited that had pioneered community care for mentally handicapped people in accordance with the Government's guidelines, heavy grant losses were being incurred because the authority was exceeding its GRE in part as a result of this policy.
How does the right hon. Gentleman respond to that penetrating challenge to a policy which is as crackpot as it is self-defeating and inhumane?
I remind the right hon. Gentleman that last summer, with overwhelming support from both sides of this Chamber, the House passed the Disabled Persons (Services, Consultation and Representation) Act 1986. The new Act placed special emphasis on the problems and needs of severely disabled people leaving institutions. It reached the statute book with the warm blessing of the Government, and the hon. Member for Braintree (Mr. Newton), then the Minister with responsibility for the Disabled, made a clear statement of his intentions on its implementation.
What has happened? Sections 5 and 6 of the Act were due to be brought into force in October. These are absolutely key sections and the delay may have already affected the futures of disabled young people leaving school or further education well into the 1990s. Yet the discussions between Government Departments and local authorities are still utterly bogged down. That is a deeply serious matter and, in the view of the organisations of and for disabled people, a wholly scandalous failure to give effect to the will of this House.
I know that the DHSS is not to blame. The blame lies with the right hon. Gentleman and the Treasury. Local authorities, quite rightly, are not prepared to start implementing the 1986 Act if they know that, if they spend the modest amounts required, they will be clobbered by the right hon. Gentleman. The amounts needed to implement sections 5 and 6 of the Act are a tiny proportion of the £500 million which the right hon. Gentleman is seeking to take from local authorities by ending grant recycling. Indeed, estimates for the implementation of the 1986 Act as a whole amount to only one fifth of that figure.
Ministers must be made to reflect on the fact that their policy of clobbering the long-term sick and disabled is a minority policy even within their own party. I urge all those many right hon. and hon. Members on the Government Benches who gave their full support to the Disabled Persons (Services, Consultation and Representation) Act 1986 last year to join me in indicating to the Secretary of State for the Environment their determination that the Government must keep to the schedule for its implementation outlined by the present Minister for Health.
If the 1970 Act, supplemented and strengthened as it is by the 1986 Act, is to be applied in the way intended by the House, we need an urgent change in the Government's whole approach to local government finance. They have very badly let down not only social services authorities but disabled people and their families. In place of the gobbledegook with which Environment Ministers now weary the House week by week, I call for a clear and

explicit statement that the Government will provide the resources needed for the full and humane implementation of the two Acts.

Mr. Robert Banks: The right hon. Member for Manchester, Wythenshawe (Mr. Morris) has spoken on a subject which is very close to his heart with all the authority that he commands in the House on this subject. I hope he will forgive me if I do not follow him specifically on the important points that he has raised this evening.
I was interested to hear the speech of the hon. Member for Norwood (Mr. Fraser) and his reference to his bewilderment over the terminology of the Bill. I share that bewilderment. Unlike my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle), I did manage to get an O-level in maths, but when it comes to working out the intricacies of the rate support grant I do not think that I am any better off than he is.
I was interested when I picked up the Bill to try to determine what it was about, and I must say that I found it extremely difficult. Nevertheless, I turned to the explanatory and financial memorandum—

Mr. Heffer: I have heard the argument used that it is byzantine theology, but it is much worse than that, because byzantine theology is very clear: first, they did not accept the Pope and, secondly, they believed that Mary the Mother of God ought to be worshipped as well as Christ himself. This is much worse than that.

Mr. Banks: I take the point to heart. I was only going to say that looking at the intricacies of the Bill and the rate support grant is rather like taking the back off a computer and looking at its internal workings— which is rather different from the analogy drawn by the hon. Member for Liverpool, Walton (Mr. Heffer).
Turning to the explanatory and financial memorandum, my eye fell on these words:
the Secretary of State determines fresh principles".
I thought it was rather interesting that the word "fresh" was used, and I could not help but wonder what had happened to the stale principles.
According to the memorandum, clause 2 clarifies the words "the appropriate class', but on turning to clause 2 I found myself in a greater fog than ever before. However, the good part about the Bill is that it has a long title, which gives it wide scope, and I want to raise certain points in the debate, as well as refer to amendments which I hope to table at a later date.
There is nothing more difficult than the formulae used for calculating the rate support grant. The stage must have been reached where we shall have to look seriously at the whole system and consider wiping the slate clean and starting again. It has become so incredibly complicated that I cannot but believe that it must require an enormous army of staff to make the interpretations that are necessary to arrive at the grant.
Having been through all this machinery to arrive at an amount for my own constituency borough council, Harrogate, the result is a round figure of £2·5 million. If it had come up with a figure of £2,491,000·50 I might have believed that there was something in the calculations and precision in taking account of all the various elements in that calculation. It amazes me that one ends up with a round figure.
I welcome the benefit that we in Harrogate have derived from the recycling mechanism and the additional grant due to the late change to the grant limitation arrangements. This has been a great help to us. I am sure that removing the safety netting or the capping multipliers would seriously affect the grant arrangement as it affects Harrogate borough council. Without the multiplier, the council's block grant in 1987–88 would be just over £0·75 million, and that would be £1·9 million short of the grant that has been allocated. It is therefore essential, from the point of view of the ratepayers in my constituency, to maintain the present level of protection. I seek the Minister's assurance tonight that there are no plans to make alterations to the safety netting and the capping multiplier system.
Turning now to one or two elements in the calculations used for the rate support grant, I take by way of example density. The density factor is one of the many factors which have to be taken into account. In Harrogate the ward-weighted density is 13·7 persons per hectare, compared with a simple across-the-board density of 1·1 persons per hectare over the whole area. This compares with York—which of course is a relatively dense area—with a ward-weighted density of 37·5 compared with 34·8 persons per hectare on the simple across-the-board density calculation. Any change from the ward to the simple calculation would be of enormous harm to Harrogate borough council and I seek the assurance of my hon. Friend the Minister that there are no plans to make any changes of that sort.
Apart from Harrogate, Knaresborough and Ripon, the areas in the surrounding district are essentially rural, and this is a factor in the sparsity element that must also be taken into account. The North Yorkshire county council is most grateful to my hon. Friend the Minister for the help that he has given to determine a sparsity factor that will take account of the education needs of the county. He deserves full recognition for that.
There are areas which specialise in bringing in visitors such as holidaymakers, conference visitors and tourists. This practice is growing enormously, and rightly so. There are many jobs to be created from the development of tourist projects and this development is more important in Yorkshire and the north of England generally than in other parts of the United Kingdom.
The figures that are used in the rate support grant take account of day visitors. The correct terminology, which I find curious, is "daytime net inflow", which is the number of people who come to an area during the day. There is reference also to "visitor nights", which means the number of visitors who stay overnight. These designations involve separate calculations and there is scope to rationalise the measurement that is based on the long-distance travel survey that was carried out as long ago as the 1970s.
The crux of the problem for Harrogate and other towns, such as Brighton, Bournemouth, Bristol and Scarborough, which are noted conference towns, lies in taking into account the importance and drawing effect that they have in bringing in visitors from other parts of the country.
Work on the construction of the Harrogate conference centre commenced in the 1970s during the period of hyper inflation. Delays, construction problems and other factors that are still the subject of a study and report contributed

to a colossal escalation in cost from an initial £7 million to £8 million base to an outfall of £31 million. As the House will understand, the cost of the centre bears heavily on the backs of the ratepayers in the district. It should be recognised, however, that the centre has established a northern venue of exceptional quality and attraction that caters for conferences of national and international importance. A large and important international medical conference is to be held there and my town will be hosting the Liberal party conference in September. I hope that the tills will be ringing throughout Harrogate while that conference sits.
The problem for Harrogate has been how to alleviate the burden of debt charges on a considerable construction cost. We are grateful to the Government for enabling the borough to extend the borrowing period. That was achieved some years ago. The methodology of calculating grant-related expenditure does not reflect the revenue expenditure for servicing the loan or operating the centre. It is certain, however, that the conference centre is a magnet for Yorkshire and the north, and the benefits to those in the transport business and in other businesses far and wide are without question. The centre has already seen bookings increase by 4 per cent, for 1987, which will increase the occupancy rate to 69 per cent. The rate for the exhibition halls is running at 90 per cent. The council will be issuing tender documents shortly, following the move to put out the catering section to private operation.
It has been set out in the rate support grant consultation paper that airports' debt charges are to be used in the coming financial year in the grant-related expenditure calculation, to the benefit of about 30 local authorities. My right hon. Friend the Secretary of State has accepted the recommendation that I have just outlined, and others include the substitution of air frost for grass frost in the assessment of grant-related expenditure for highway winter maintenance. That is a good illustration of how detailed and complex the formula has become for arranging for a block grant to be given to a local authority.
I ask my right hon. Friend the Secretary of State to include the debt charges on conference centres in the category into which airport debt charges come. That would benefit Harrogate, Brighton, Bristol and other towns that are faced with the problem of bringing in people from far and wide and contributing to a large extent to the prosperity of an area that is larger than that of the town itself. I ask my right hon. and hon. Friends to give consideration to my request. I shall be seeking in Committee to table an amendment on this issue so that the Committee will have an opportunity to debate the matter fully.
Nothing is more important than using the RSG to give support to authorities, especially those in Yorkshire and the north of England generally, which through environmental schemes and other projects, are making their areas attractive to visitors and giving support to tourism projects which are sponsored by private enterprise or developed in partnership with it. I would far rather see the mechanism used to give support to towns in the north of England, especially those that have high unemployment, than give grants to try to cajole businesses to come to certain areas. If individual areas are made more attractive, they will attract visitors and become more attractive to those who decide about the placing of industries. Greater


attractiveness will encourage those from outside to live and settle in the areas that I am talking about and that will be accompanied by the creation of new business enterprise.
I ask my right hon. and hon. Friends again specifically to consider introducing into the formula the debt charges that are carried by authorities which have provided the service of a conference centre. I hope that my right hon. Friend will look favourably upon my request.

Mr. Michael Hancock: First, I must declare an interest. I am a member of Hampshire county council and Portsmouth city council and I shall be involved in the implementation of the Bill once it is enacted.
If I were a cynical person, I would suggest that the Secretary of State's absence from the Chamber is because he has started already to formulate the amendments and new clauses that he will be introducing in Committee. If previous experience is to be taken into account, we might end up with a Bill that is considerably longer than the measure that is before us. It may not resemble the one that we are discussing now. Perhaps the right hon. Gentleman's absence is explained by his attempts already to refine the amendments that will be put before us when we consider the Bill in Committee.
It is clear that we are witnessing yet another attack on local authorities and their ability to cope with their problems. The Government have introduced legislation that will supposedly improve local democracy, but I suggest that it will do the opposite. Once again, the legislation will seriously undermine the ability of local authorities to respond properly to the needs of their communities.
I accept that the recycling system produces uncertainties for local authorities. Indeed, when the statement about this legislation was made last year, my hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) said that we were prepared to support it but that we had strong reservations about the way in which it would be implemented. Now that we have the Bill before us our worst fears have been realised. We have grave reservations about the way in which the Bill will operate. I suggest that the only sensible course of action for hon. Members who care about local authorities is to resist the easy temptation to vote for the Second Reading. I know that we shall vote against it.

Mr. Squire: What, all of you?

Mr. Hancock: My hon. Friends will rush back from where their endeavours have taken them and we shall all vote in the same Lobby.
The proposed change is something akin to what the hon. Member for Norwood (Mr. Fraser) suggested, when he compared it to taking the prize away from a premium bond holder. I would go further: it is like taking the right of appeal from a condemned man. It certainly removes any uncertainty, but it will not encourage local authorities to believe that they will benefit. Conservative Members have not been able to justify what will happen to many local authorities that will lose out. Many Conservative Members know from experience that their local authorities will suffer. They will not have the expenditure necessary to serve their areas.
The Government are now deliberately endeavouring to embark on a process of underestimating the expenditure

assumptions of local authorities. In that way the Treasury can get the money back from the local authorities. The Government are making the task of the local authorities harder. The Government are deliberately underestimating what it takes to run an authority and the only body that will benefit will be the Treasury.
Even if one gives the Government the benefit of every possible doubt, it is suggested that the Exchequer will be some £400 million better off as a result of the legislation. Local authorities will find it more difficult to decide their priorities. The irony is that most local authorities will lose grant and, as a result, the Government will have more money available for tax cuts. It is suggested that the £400 million will be used to bail out the Government's promise of tax reductions. Once again, cynical hon. Members would suggest that there is a degree of logic behind that argument.
The Government have made it clear that not only the high spenders will be affected—most local authorities have benefited from the flowback in the current financial year. Figures produced by the Department suggest that over 500 local authorities have benefited. Therefore, those 500 local authorities, as well as the high spenders, will also suffer. Hampshire is a big spender and will suffer considerably. However, over the past seven years, it followed to the letter Government instructions concerning changes to local government finance. Other local authorities such as West Sussex, Dorset, Kent and Surrey will also be losers under the proposed changes. I do not care that the hon. Members who represent those authorities are not here today, but I am damn sure that the people who live in their constituencies will be concerned that they are not here to defend their ability to use the services of their local authorities.

Mr. Squire: I believe that the hon. Gentleman is rather overdoing it. Let me give him a simple analogy. If we follow through the hon. Gentleman's principle, will his party give all Government Departments—whether they have spent above budget, below budget or on budget—extra sums of money each February simply because it is February and it is a nice thing to do?

Mr. Hancock: The hon. Gentleman is making a rather silly point. We would make sure that local government expenditure took care of the specific needs of the areas. That expenditure would not be conceived in Marsham street or some other Government Department. It would take into account the proper needs of the community.
The right hon. Member for Manchester, Wythenshawe (Mr. Morris) has already discussed the problems facing the disabled. The Government must be embarrassed that many local authorities cannot fulfil their commitments to the disabled in their areas. That cannot be something of which Ministers are proud. I am sure that Conservative Members must be squirming in their seats at the embarrassment to which they and their colleagues in local government have been exposed.
The Association of Metropolitan Authorities has doubts about the necessity for the Bill. It believes that the Bill is necessary to abolish the present system but it focuses attention on the new powers that the Secretary of State is trying to slip in on the Bill's coat tails. The AMA recognises the need for change, but it also recognises the true problem contained in the Bill—the extra powers given to the Secretary of State and their potential effect on local authorities.
The Trojan horse in the Bill is clause 1(3). It allows the Secretary of State not only to victimise one or more local authority if he does not happen to like its political colour but, alternatively, it allows him to favour individual local authorities if he chooses. We should be concerned about that. The Secretary of State can not only screw down the high spenders but, if it suited him for political purposes, encourage some local authority by giving it more assistance. That takes away any fairness—if that is the right word—in the operation of the system. It affects the way in which the Secretary of State responds to the needs of local government as a whole.
Undoubtedly, that is something that will worry hon. Members and will occupy many hours in Committee. If it is the Government's intention to create a new class of authority—specifically identified as education authorities or rate-capped authorities—that intention should be clearly stated. That should be spelt out and, at the very least, the House should have the opportunity to scrutinise any new expenditure assumption made in subsection (3).
The Minister represents a constituency in the same county as myself, and the county treasurer of Hampshire has described the Bill as being
a very severe and unfair mechanism for restraining individual local authority spending.
I do not suggest that Mr. Scotford is anything but a first-class officer who respects the rule of law and the rights of government. However, the fact that he described the effects in such a manner must surely strike a chord in the democratic heart that beats somewhere on the Government Benches. It is not right that a county treasurer should have such an opinion of a Bill of this nature.
I hope that when the Minister replies he will recognise that the proposals in the Bill will mean that the county will lose not £17 million as originally quoted but close on £20 million. Absorbing that sort of loss will mean enormous difficulties. As I said recently—and I had an absurd reply from the Secretary of State—the whole of the planning and transportation department of Hampshire county council would cease to operate. If we tried to share the burden, libraries would be closed, firemen would be ill equipped and there would be fewer poliemen and police cars to patrol the streets to try to curtail the enormous growth in crime that Hampshire has suffered during the past few years. It would mean fewer home helps and a reduction of the ability of the social services to provide adequate and proper care. Hampshire has the second ' highest number of children in care of any local authority, and the legislation will diminish Hampshire's ability to cope with the problems.
We must carefully study the Bill because it is not good enough. We hope that the Minister will recognise that, sooner or later, the crumbling edifice that has been created during the past seven years—the farcical way in which local government finance is administered—will come tumbling down around us. I am sure that local authorities will welcome the day when they have total control over their income and over their ability to spend it. However, the only way in which that can be achieved is by introducing a system of local income tax, although I do not mean a system similar to that proposed for Scotland, where the poll tax will further diminish the money-raising powers of local authorities.
The rating system is obviously incapable of providing genuine local democracy. We must free local government from centralisation. We must try to give it the impetus it needs to move properly with the times. This Bill will do none of that. In fact, it will make matters worse.
If we are not to paint a very sad picture of the future of our cities, we must heed the report in The Guardian on 30 January entitled
Ridley rules out rescuing eight Labour councils from £300 million spending gulf.
The final paragraph of the article reports one chief executive of the authorities affected as saying:
To argue that without improvements to local government inner London is only a few years behind Harlem and the Bronx is, to be kind, imaginative.
If the Government proceed along their present route—and last week's and today's legislation will undoubtedly lead them along that route—inner London will be on a par not only with Harlem and the Bronx but with many other areas in Britain, and not only those confined to the inner cities. Rural areas will suffer real deprivation because all counties and all councils will suffer. No one in his right mind should welcome this Bill.

Mr. Robin Squire: With the exception of one or two comments on inner cities, I could not find very much in the speech of the hon. Member for Portsmouth, South (Mr. Hancock) with which I could readily agree.
I welcome the legislation, which I regard as a natural consequence of the present system. I apologise to the hon. Member for Norwood (Mr. Fraser) for not having been in the Chamber to hear his speech, but I can assure him that I shall read it.
My right hon. and hon. Friends on the Treasury Bench will be aware that I have had the odd disagreement with the Government about the present system. Since I came to the House seven years ago, I have consistently said that we should move towards a system that dramatically reduces the amounts that are dictated from the centre and gives local authorities a more dynamic and widespread source of funding. However, I am aware that the House would not wish me to go into great detail about that today.
In the context of the present system, the central proposal in this legislation makes a great deal of sense. After all, primarily we are talking about certainty and good housekeeping. I remember that only a few years ago, when the Local Government Act 1982 was passing through the House, the Government attempted to include a provision that would allow them to change the rules during the year. The provision was known as the mid-term holdback, and it would have allowed the Government to go to local authorities half, two thirds or three quarters of the way through the year and take back some of the money that they had said they would give.
That provision was opposed by a number of Conservative Members and by the Opposition, and, for a variety of reasons, it did not happen. Certainly, the principle that guided my opposition to that provision was the same principle as we face today, except that it is the other way around. We are now considering a system—I have endeavoured to get this point across without much success, especially with the hon. Member for Portsmouth, South—under which local authorities, whether they are good or bad, high spenders, medium spenders or low spenders, have fixed their budgets at the beginning of the


financial year. They assess their likely income and likely expenditure, taking into account the level of Government support. Then, guess what happens. As if by magic the seventh cavalry comes to the rescue of many authorities and provides more funding. It does not matter whether they "deserve" it—I put the word in inverted commas because there are sensitive souls in the House—it is simply a consequence of the system.
I do not think that, stripped of party-political labels, hon. Members honestly think that that is an intelligent way to budget. It certainly does not impose proper disciplines on local authorities. I am a great defender of local government, and I do not think that even my worst enemies would deny that. I have great faith in the ability of local councils to run their affairs effectively. Given a fixed budget at the beginning of the year, I believe that they can deliver an outturn roughly on the level of budget fixed. It does not in any way encourage a sensible budget-making process to have the present adjustments.
The Association of County Councils—a body to which I listen carefully—spoke, understandably in this context, of the money being lost to the local authorities' pool. I understand what the association means, but to agree with that interpretation would imply that local authorities were acting in concert and that the direct consequence of each of their separate decisions should therefore be retained within local authorities. It is my experience and, I suggest, that of every hon. Member, that local authorities manifestly do not act in concert. Even if we ignored different authorities under different party control and simply considered those under similar party control, we could produce an intersting list of councils that did everything except act in concert. It is, at best, a theory to view the issue as one of some local authority pool being lost.
Linked with good housekeeping is testing the efficiency of local authorities. I believe that many, if not most, local authorities are more efficient than several branches of Government. I have said that before and I shall say it again. As the recent Audit Commission report makes clear—the hon. Member for Liverpool, Walton (Mr. Heffer) referred to this earlier—the level of inefficiency in some authorities is quite appalling. My hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) went into this matter in some detail, and I do not propose to follow him line by line. I simply wish to highlight two or three brief points arising from the report because it goes to the heart of the whole question of efficiency.
The report demonstrated that the eight London Labour authorities that it named have twice as many staff in post per thousand population as the most deprived metropolitan districts outside London. The implication is that inner London in particular knows deprivation and the cost that that undoubtedly brings. However, there are many areas of high deprivation, but administratively speaking, those areas are spending at twice the level. That is frightening. Secondly, it was discovered that there was a gap of 100 per cent, between expenditure per head in inner London and the most deprived authorities outside the capital.
It is not a question of Socialism. I am the first to go to battle for or against specific policies. I am sure that many Opposition Members would be the first to recognise in their heart of hearts that we are talking about inefficiency and that inefficiency is doing a disservice to the Labour party rather than to the Conservative party.
There are further implications which worry me still more. Many authorities find it difficult to recruit senior staff-those who earn over £25,000 a year. That is a substantial sum. The figures in the Audit Commission report show that, despite the problems of unemployment and all the other difficulties about which we regularly read, those authorities find it enormously difficult to attract qualified senior staff. One consequence may be that some senior and responsible staff appointed may have less ability than we would wish, and, of course, they are prey to the suspicion that they are appointed as much on party political considerations as on ability.
That is always a fear, but it is more of a fear when candidates have to be chosen from among one or two dozen rather than from 100 or 200. I am talking about incompetence rather than about any high-flown Socialist, or even Conservative, theory.
This is a short, but I believe important, Bill. I should be grateful if my hon. Friend the Minister would answer the query raised by the Association of Metropolitan Authorities about the possible interpretation of clause 1(1)(b). The AMA charmingly stresses that the theory could be either malign or benign and, for reasons that will come as no surprise to any hon. Member in the Chamber, the AMA is more naturally concerned about a malign interpretation.
The AMA says that the clause
allows for differential close-ending of grant entitlements. In other words the Secretary of State may make assumptions on different bases about the spending of individual authorities and therefore potentially drastically alter the block grant entitlements of local authorities, for instance penalising those who do not spend in line with his expenditure assumptions.
It is possible that the AMA is chasing a false hare. Indeed, the words I have quoted were sufficiently surrounded by "ifs" and "ands". However, I hope that my hon. Friend will deal with that matter in his reply.
I do not foresee any major problems with the Bill. Some people say that the Bill will lead to a loss of grant, but I assume that the real argument is that more grant should be given to local authorities under the initial settlement. That is a perfectly valid view. I might find myself manning a similar barricade in many other instances. But the time to make that view known is when the initial allocations are made. The present system, which is a somewhat accidental top up, has little to commend it and it owes nothing to any sort of discipline. When the system is changed by the Bill I am sure that it will be more efficient and effective.

Mr. Allan Roberts: I am most disappointed with the speech of the hon. Member for Hornchurch (Mr. Squire), especially as, claiming to be a supporter of local government, he has been my co-conspirator in a number of private Bills to open up local government in terms of access and freedom of information. We want to make everything open and free, except for private meetings to discuss the Bills which we are introducing.
For one who claims to oppose dictation by central Government to local government, the hon. Gentleman made a very strange speech. Indeed, it was a very strange speech for a supporter of local government, damning with faint praise, assenting with civil leer, and—seemingly—without sneering, teaching the rest to sneer. The hon. Gentleman is obviously a supporter of Tory local government rather than local government as a matter of principle.
The Bill continues a long line of pieces of legislation that the Government have introduced to take more power to the centre and to take away freedom and rights from local democracy. This is the 42nd or 43rd piece of local government legislation, or legislation directly affecting local government, in England, Wales and Scotland since 1979. It is the 16th Bill dealing with local government finance. The Bill is
designed to remove this uncertainty by making further provision for calculating the block grant payable.
The Rate Support Grant Bill 1986, now in the other place, is
An Act to validate certain block grant determinations already approved by the House of Commons; and to clarify and amend the law relating to rate support grants.
The Local Government Act 1986 is
An Act to require rating authorities to set a rate on or before 1st April; to prohibit political publicity and otherwise restrain local authority publicity.
The Local Government Act 1985 is
An Act to abolish the Greater London Council and the metropolitan county councils; to transfer their functions to the local authorities in their areas and, in some cases, to other bodies.
The Local Government (Interim Provisions) Act 1984 is
An Act to make provision for the composition of the Greater London Council and the metropolitan county councils pending a decision by Parliament on their continued existence.
The Rates Act 1984 is
An Act to enable the Secretary of State to limit the rates made and precepts issued by local authorities.
The Local Government (Miscellaneous Provisions) Act 1982 is
An Act to make amendments for England and Wales of provisions of that part of the law relating to local authorities or highways which is commonly amended by local Acts.
The Local Government Finance Act 1982 is
An Act to abolish supplementary rates and supplementary precepts; to require rates and precepts to be made or issued for complete financial years".
I have quoted from the long titles of only a few of the Acts introduced by this Government. It all started with the Local Government, Planning and Land Act 1980, which had the audacity to call itself—and this is how it still reads—
An Act to relax controls over local and certain other authorities".
Since that Act we have had a plethora of legislation designed to interfere with the freedom of local government, destroy local democracy and concentrate power not here in Westminster, but in Whitehall, in the Department of the Environment. Under that legislation—and this Bill is no exception—Ministers may take powers unto themselves to penalise one authority and help another at their discretion and by means of their own determinations. If precedent is anything to go by, the decisions have been political, taken by Ministers, to penalise Labour authorities and, supposedly, to help Conservative authorities. Recently, however, even the promises made to Conservative authorities have begun to be broken.
Conservative Members may be surprised to learn that the Bill is not an attack on the so-called loony Left or the Liverpools of this world. It penalises the so-called "underspenders"; it penalises the whole of local government. It will take at least £500 million away from local government.
Conservative Members are concerned that when grant is withdrawn from local authorities that the Government say have overspent, the money is generally redistributed so that every local authority benefits, including those so-called overspenders. So why do we not have before us a Bill to fulfil the promises of previous Tory Secretaries of State to redistribute the grant that is clawed back to the underspenders-to the so-called prudent authorities?
Ron Watson, the then leader of Sefton council, which was Conservative-controlled until last May—it is now hung or, as the Liberals would say, "balanced"—justified his council's support for the rate-capping legislation and for the plethora of legislation increasing central Government's control over local authorities on the ground that under such legislation authorities such as Manchester, which spent a lot of money, would lose grant, while authorities such as his, which wielded the axe with enthusiasm and did everything that the Government asked it to do to cut services and keep the rates down, would benefit in terms of rate support grant.
After many years of Tory control, Sefton is now to lose a significant sum under last year's budget, determined by the Tories, and this year's budget, which will be determined by a hung council. If we assume a 3 per cent, expenditure over the Government's target, Sefton will lose £1·121 million in the next financial year. If it spends 5 per cent, over the Government's target, it will lose £1·869 million. Like the whole of Merseyside, Sefton will suffer, too, from the clawback of grant from the Merseyside police, fire and transport services, which are to lose £4·103 million, £725,000 and £4·391 million respectively. That money will not be redistributed to anyone and it is in addition to the £6 million that has already been taken away from the Merseyside police force in the rate support grant settlement to be given to the shire counties. We are talking about an area with a massive crime wave, which needs all the money that it can get for policing facilities.
That shows the nature and scale of the impositions that the Bill, by ending recycling, will make on hard-hit areas with high unemployment. It will affect not only Labour Liverpool but what was until recently Tory Sefton-one of the lowest rated metropolitan districts in the country, and an authority of what I would describe as the loony Right. Such authorities close schools for the handicapped and learner swimming pools, while at the same time they spend money on fairy lights for Lord street in Southport and provide grants for statues of Red Rum. Those were the loony Right-wing priorities of Sefton, which cut social services, education and other services.
Sefton's reward for making the people in the area suffer and for keeping the rates down is not to be extra grant but an end to grant recycling and the loss of even more grant. In 1980–81 Sefton received £50·237 million in rate support grant; in 1981–82, £47 million; in 1982–83, £45 million; in 1983–84, £45 million; in 1984–85, £43 million; and in 1985–86, £44 million. It is with those massive cuts that this Government have rewarded Conservative-controlled local authorities for cutting services and keeping down the rates. It seems that Sefton's final rate support grant figure for 1986–87 will be only £45·78 million. The budget, introduced by the outgoing Tory administration, meant a massive rate increase of 19 per cent., as well as cuts in service.
I am pleased to say that the change in grant recycling arrangements will not hit the proposals of the Labour group on Sefton council, which are to be put forward for


consideration at the next budget meeting. For the first time ever, we have a growth budget—the kind of budget of which any sane, sensible, responsible local authority could be proud. Now that we have got rid of overall Tory control in Sefton, things are looking up. The Labour group proposes an extra £3 million revenue which will allow for the creation of 125 genuine jobs for teachers, home helps, nursery nurses and others in various departments.
The proposed Labour budget earmarks £1·7 million for improvements in education, such as an increased pupil-teacher ratio, repairs and maintenance to the borough's schools, which are neglected and dilapidated, £100,000 for the new GCSE examination and £50,000 for additional discretionary awards. It is scandalous that young students with places in colleges of higher education—students from Liverpool and Manchester or one of the other areas with criticised so-called Left-wing councils—got the grant, but students from Tory-controlled Sefton did not get one and therefore could not go to an institution of higher education.
We are proposing to put that right by providing an extra £50,000 for discretionary awards, a further £20,000 for postgraduate awards, £30,000 for school swimming programmes and £100,000 for the borough's youth service, which is essential in an area of high youth unemployment. The social services will get £750,000, including £40,000 for aids and adaptations for the disabled.
Sefton was the kind of local authority that my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) mentioned. It did not break the rate-capping legislation but it broke the statutory legislation—the Chronically Sick and Disabled Persons Act—by having illegal waiting lists and not providing the necessary services and facilities for the disabled.
We shall also allocate £115,000 to works for the elderly and the mentally infirm. If that is what is meant by the Loony Left, I plead guilty. If the budget proposals and improvements in services in my area and in Southport and Crosby are the kind of thing that Conservative Members want to condemn, I am happy for them to do so and to put their views to the electorate, because all these so-called Left-wing Labour councils have been returned to power over the past few years.
I congratulate Councillor Benton, leader of Sefton's Labour group, on his marvellous statement that Labour's budget, if adopted, would bring good news to the borough's council tenants.
We don't propose any rent increase for tenants for this year",
he said, but an increase in repairs and maintenance as a result of the profits which the Tories have made on the housing revenue account, which will not be given back to the tenants in the form of no rent increase and improved repairs and maintenance. He continued:
It is the first time for a number of years that we have been in a position to show any growth within Sefton services and we welcome this. We can't in one year restore all the damage done by cuts since 1979, but this will indicate our gradual progression in the present political climate".
That is a major achievement, given that the Government are still cutting grant and are taking away up to £3 million that Sefton would have received next year if recycling had remained and this Bill had not been introduced.
This is a tawdry little Bill. It will pinch at least £400 million from local government. The money is not being taken from Left-wing councils or from overspending councils—I use the Government's term, although I do

not believe that they are overspending. Those councils are trying desperately to meet the needs of their areas and to provide the services that are demanded by a higher percentage of one-parent families, greater poverty, more children on free school meals, deprivation and unemployment.
The Government are taking money not only from those who are fighting to provide services but from the whole of local government, including those so-called underspenders that successive Conservative Secretaries of State for the Environment have promised to help. The Government are stealing the money by the back door and giving it to the Treasury so that the Treasury can use it, with other money that it is stealing, for tax cuts in the Budget in preparation for a probable early general election. That is what the Bill is about. It is a scandalous little Bill and it should be rejected.

Mr. Bill Michie (Sheffield, Heeley): I follow my right hon. and hon. Friends in condemning the Bill. It is another blow against local authority democracy. Clause 1 gives the Secretary of State broad discretion on several issues. For example, he may determine the principles for calculating grant-related poundages for the rate support grant report, and any supplementary report, on any basis. He may also make assumptions on any basis about the total expenditure of local authorities. He does not need to match claims for grants from local authorities with the originally determined total of block grant available. He may make wholly different assumptions about the position of individual local authorities.
I recall the Minister's opening remarks when he said that if local authorities spend less they will get more Government money. That might sound reasonable, although it does not make sense for local authorities that are not unreasonable in their spending, but fulfil their obligations, not only to the electorate, but in the provision of services. It is totally unrealistic to say that if an authority spends less money now it will be rewarded later.
I accept that there must be more clarity and certainty, but I do not believe that the Bill will fulfil that obligation either. We should consider the needs of different areas in the country, and the obligations that they place on the appropriate authorities.
It has been said that the Bill is a microscope to consider whether local authorities are efficient, or overspend and are irresponsible. I do not mind a microscope being placed on local authorities, but I should prefer it to cover not just the financial situation but the services and needs of those areas. That is not being done.
The provision of accommodation for the elderly and for social care services is being ignored. The ever-growing pressure of educational needs, especially in inner city areas, and the problems of inner-city deprivation and massive unemployment in areas such as Sheffield are also being ignored. There is also the problem of trying to keep up the morale of people who feel that they are under constant and increasing attack from a Government who do not understand their needs or the pressures on them.
On Monday, I was privileged to be present when Sheffield city council opened a new job project to create as many job opportunities and training facilities as possible within the limitations that have been imposed. It is a good scheme that looks to the future, and looks after the young by giving them something to hope for. However,


because of the massive financial restrictions that have been placed upon the council by the Government, the project will not be as successful as it could be.

Mr. Martin Flannery: My hon. Friend has referred to our city of Sheffield and to the cuts that we have sustained. There have been attacks on the south Yorkshire transport system, and there is massive unemployment. At 4 o'clock this afternoon, I learned that 600 redundancies had just been declared in the large Stockbridge steel works in my constituency. We have to contend with that sort of thing from the Government, in addition to their policy of cuts, cuts and more cuts in every direction.

Mr. Michie: I understand what my hon. Friend has said. He has given another example of the tragedy that we are facing. However, there is no way in which the city council can respond because of the continuing restrictions. The problems do not go away, but are with us all the time. The fact that the council cannot react to them because of the lack of finance does not mean that the problem suddenly disappears. It means that, through no fault of their own, ordinary people cannot get the help that would normally be provided by the city council, if all things were fair and equal.
Sheffield is a rate-capped authority, but the fact that it has no recycling money will also affect the Sheffield area in the long term. Last week, a headline in my local paper read, "Residents weep as home closes." The article tells the story of a home that would have been all right had some work been done on it, but it was discovered that the electrics were all wrong. The city council's finances are now so restrained that there is absolutely no way that it can improve such homes to the necessary standards. The old people can be removed from the home that they obviously love and fitted in elsewhere, but the net effect is that other people who need that sort of accommodation will have to stay at home and perhaps be looked after by loved ones. Others may be totally neglected, unless much better financial provision is made.
The services that Sheffield has provided over many years are still needed, but the buildings and services have to change. The longer those buildings are used, the more they cost and the more they will have to be changed to be brought up to modern standards. That work cannot now be done because of the restraints placed on the council. We cannot update the services that have been carried out for between 20 and 50 years.
The Government appear to have taken a microscope to local government but have ignored, or have chosen to ignore-perhaps they do not really understand-those problems.
The Government cannot tell the world to stand still while local authority expenditure is restrained. Although we have had meetings with the Ministers and, I believe, proved our case, the reaction has always been the same.
Some activities that have been carried out by Sheffield city council have been done at the request of central Government, but I do not believe that the council will be able to fulfil them in the future. The Government discuss the efficiency of city councils and local authorities, but we have spelt out to them many times the fact that even the district auditor has commended the city council on its effectiveness and on the value for money that it has been

able to achieve in the services that it provides. The attacks have not been made just to save the ratepayers or taxpayers money. There has been a political attack on local authorities. It is an attack on the services that have been provided by caring authorities, and an attack on the services that our citizens require and demand. The Government seem to have taken a tremendous dislike to the caring image that is presented by many local authorities.
I wish to refer to the problem of providing services and especially accommodation for the elderly. This is a catch 22 situation. We all agree with the regulations that place certain standards of care on local authorities. How can a local authority respond to the regulations that have been placed upon it by central Government if the financial restraints are becoming more severe with each year that passes? How can a local authority look after the people that it has to remove from institutions because of a lack of maintenance money or general revenue? What will happen to those who are still waiting to receive those services? Are they to die alone? If there is a tragedy, the blaze of publicity will throw the blame not on central Government, but on the local council, social worker, housing visitor or the health visitor. Neither the problem nor the responsibility lies fully with those people.
We need to try to educate the Government to look at local authorities in a more positive and rational manner. The answers to the problems will not be found by Government officers, but lie within the local communities.
I have already outlined the consequences of this legislation and repeat that life and limb will be put at risk. I know that the Minister met delegations yesterday from the Fire Brigades Union, which tried to spell out exactly what the consequences would be if further restrictions were placed on local government finances. I met that delegation also. Last time I spoke on this subject, I talked about the worry that south Yorkshire would not be able to carry out its statutory responsibilities. I was rather surprised to discover that schools and hospitals are not covered by the so-called statutory responsibility of cover for fire prevention. There is a high risk of the fire service being unable to cover schools and hospitals, again because of a lack of resources. The chief fire officer of south Yorkshire has made it clear that the fire service already operates below the minimum standards required. That makes the probable further restrictions even more worrying. Last year, on 1,500 occasions the fire appliances that were called out to major fires were undermanned. This year the restrictions will make the situation even worse.
I cannot think why we have a financial formula which only takes into account finances in order to put money back into the Treasury pots. Many people are at risk from a lack of care and because the fire services are undermanned, firemen are likely to put themselves in greater danger. Normally local government can respond, and people throughout the country have enjoyed the benefits of that, but now no services of any consequence can be provided.

Mr. Eric S. Heffer: The Bill must be opposed and the Labour party will oppose it. It reminds me of the Tory philosophy that I first discovered when I was a councillor in Liverpool many years ago. I was a member of the children's committee and we discussed the


possibility of providing three or four bicycles for children in a home. We agreed to do so and then a Tory lady councillor said, "I hope they will be secondhand bicycles." I shall never forget that. I also remember discussing whether we should install central heating in the dormitories of children's homes. One lady, who no doubt lived in a nice house with central heating in every room, including the bedrooms, said, "You don't really need central heating in dormitories. It is better for children not to have it. They grow up strong." That summed up Tory philosophy. The Bill and everything that the Government have done with rate support grants over the years sums up that same Tory philosophy.
Since 1979 the Government have cut £17 billion in rate support grant to local government. Imagine everything that could have been done with that for children, the old, those who need homes to live in and those who are dispossessed. The Bill adds to that problem.
My hon. Friend the Member for Bootle (Mr. Roberts) has described what has happened on Merseyside and I shall describe what could happen in Liverpool. The settlement amounts to £128·316 million, and before anybody gets enthusiastic about it, they should understand the problems facing Liverpool. We have high levels of unemployment. Despite what Labour authorities have achieved over the past three years, people live in slum properties which should have been pulled down many years ago. We have a drugs problem and terrible pressures, yet what do we find? If the budget exceeds the Department of the Environment's assumption by 3 per cent., local government will lose £7·252 million; if it exceeds the assumption by 5 per cent., it will lose more than £12 million. In other words, the local authority dare not go beyond the Government's limit. Talk about centralised control. The Government talk about freedom, yet they tell local authorities, "Do this or you will suffer worse than you have suffered in the past." That is unacceptable.
I should like to suggest what the Labour party should do when we return to office. First, we should not hesitate to abolish rate capping and the penalty system. Secondly, we should abolish surcharges on local councils for carrying out policies which they have said they will follow. We should certainly abolish the disqualification of councillors. Councillors have already been disqualified in Lambeth and some may be disqualified in Liverpool, if the case goes against them. I hope that it does not and that the House of Lords will have enough sense not to agree to their disqualification. However, if they do not, we shall abolish surcharges and the disqualification of decent, ordinary, working people who carry out their policies.
Thirdly, we should restore central Government grant to its level prior to 1979. Some will say that I am asking for too much, but I do not think so. Even if we restore it to the 1979 level, because of the higher costs involved we are not restoring it to the level at which it should be, but only to the level at which it would have been if we had not had the Government's policies. The distribution of rate support grant must certainly be reformed, based on a genuine assessment of local authority needs.
Fourthly, we must introduce special measures through the grant system to assist financially local authorities which have been forced to use creative accountancy measures. Did any of them want to use those measures? Of course not. They were forced into it because they had no choice. That has led to further problems for local authorities.
Fifthly, we should abolish the controls on capital spending to allow local councils the freedom to determine and plan their local capital programmes. Sixthly, we should provide cheap loans to local councils which seek to expand their local capital programmes in order to tackle homelessness and urban deprivation, and to generate employment. Hon. Members who have not read the Church of England's document "Faith in the City'" should study it. I refer particularly to Tory Members who often talk about being Christians and members of the Church of England. That document goes beyond what we in the Labour party are advocating.
Seventhly, local authority powers should be extended so that authorities can interven in the local community and economy, particularly in relation to raising the 2p limit on section 137 moneys. Eighthly, we should repeal the Government's privatisation legislation and replace it with both a statutory requirement on minimum pay and conditions for local authority employees and equal opportunities policies.
Finally, we should restore the Greater London council. It is an absolute scandal that it has been abolished. It is wrong for our capital city not to have a local authority covering the whole area. It is an absolute nonsense and it should be restored.
We must bring the police service under democratic control. We must do that on the basis of what we have seen recently. That does not mean political control, as Conservative Members are always saying. It means control by people who are elected and who, if the electorate do not like them, can be turned out. Democratic control is vital.
We must consider the concept of more regional Government in certain areas to deal with the problems.
I hope that I have summed up what I think should be done. Unfortunately, we will not win the vote tonight. The trouble in the House now is that we always win the argument hands down but we lose the vote. In the next election we will not only win the argument but win the vote as well.

Mr. Roland Boyes: I should like to explain why the Newham Members have been unable to be present during the debate. They have been talking to a large number of people who are lobbying because of the effects of local government finance measures on their borough. It should be on the record that Newham is being rate-capped for the first time without any appeal.
The Bill is a squalid one. It is one of a series of squalid Bills introduced in recent weeks which have included retrospective legislation and which have been designed to rob local authorities of power.
I shall put the Bill into context. On 20 January 1986 the Secretary of State for the Environment, now the Secretary of State for Education and Science, said:
Under the old system of targets and penalties, the grant lost by the high spenders was surrendered to the Treasury … Under the new system, the grant that will be lost by the high spenders will form a pool which will be recycled to local authorities.—[Official Report, 20 January 1986; Vol. 90, c. 48.]
The then Secretary of State made much political capital of his decision to introduce grant recycling. Just over one year later we are debating a Bill to bring an end to grant


recycling. That is not surprising in the context of the way in which the Government have treated local authorities, particularly in respect of finance.
The Government have created a system of local government finance that is so complex, with so many irregularities and illegalities, that the only people benefiting and laughing all the way to the bank are the lawyers. The system is so unsound that it makes one wonder about the lawyers in the Department of the Environment. However, I suspect that their advice has probably been ignored for political expediency. We know with certainty that neither the people who administer the system in the atmosphere of uncertainty nor the people whom they serve benefit. The system, shrouded in illegalities, can be tinkered with no longer. A system which is understood by all, and which gives certainty, must be introduced urgently. The Government have forfeited their opportunity to carry out that task. In fact, if the present Government were measured on their treatment of local government alone they would be relieved of office forthwith, and so they should be.
My hon. Friend the Member for Norwood (Mr. Fraser) and my other hon. Friends who have spoken have explained in a simple and understandable way how the amount of cash in recycling is arrived at. I shall not waste the time of the House by reiterating what has already been said. On 5 March 1986 the then Secretary of State for the Environment stated in a written answer:
On the evidence now available to me about local authority budgets in 1986–87, I am satisfied that there will be a grant underclaim of at least £500 million."[Official Report, 5 March 1986; Vol. 93, c. 190.]
He continued by declaring his willingness to guarantee that amount.
The Association of County Councils gave a guarded welcome to the scheme. In a press release issued on 5 March it said:
The Government's guarantee … will bring a welcome degree of certainty to shire counties and counties … will nevertheless be glad that this money will benefit ratepayers.
However, the chairman of the association, Mr. John Lovill, pointed out that the £500 million was still a recycling of a total grant that is less in cash terms than in the current financial year.
By 7 May 1986 the Secretary of State had informed the public, through a Department of the Environment press release, that his guarantee to recycle £500 million would not be called upon. His officials had discovered a grant underclaim of £628 million that was available for distribution to local authorities. I am sure that the fact that that announcement was made to the newspapers less than 24 hours before polling began for the by-elections in Derbyshire, West and Ryedale was purely coincidental. The Department said that it was a routine announcement. Those who believe that must live in a dream world.
The Association of County Councils pointed out in its own press release on 13 May 1986 that the announcement did not represent new money for local authorities. The association's cool attitude led it to say that there was uncertainty about the future of the recycling because the amount would change, as authorities' spending inevitably varied from their budgets. Local authorities do not like uncertainty. However, they must prefer uncertainty about the amount they will get to the certainty of getting nothing. That was to come.
In his first rate support grant settlement consultation paper, 1987–88, the Secretary of State confirmed that grant recycling was to be abolished. He demonstrated his ability to write excellent Orwellian double-speak. In paragraph 5 he proposed to introduce
a further change which will provide individual authorities with greater certainty as to their grant entitlement.
In paragraph 6 of the same document he argued that local authorities which overspent were entitled to less grant, which was then redistributed. He continued by saying that one local authority did not know by how much another was going to overspend, so no one knew how much was going to be recycled. The announcement of the amount to be recycled was made late and it was difficult to take into account when setting the rates precept. The Secretary of State, therefore, introduced certainty. Recycling was finally to be ended altogether.
The Secretary of State demonstrated that he was able, not only to write double-speak, but to talk it. On 22 July 1986, during his rate support grant statement for 1987–88, he said that he intended to abolish grant recycling. He said:
As a result, authorities will be able to plan their budgets and rates with much greater assurance.
That is an excellent example of Orwellian's new language. My hon. Friend the Member for Copeland (Dr. Cunningham) questioned the Secretary of State on his statement. He said:
Is not the Secretary of State also, in his plan to end recycling of grant, effectively saying to local authorities, 'Here is additional money in the settlement, which will be taken away later, almost certainly in at least an equal amount, by the termination of recycling of grant'? Does not that simply mean a massive windfall for the Treasury, which will be used for other purposes than local authority expenditure?"—[Official Report, 22 July 1986; Vol. 102, c.182–83.]
The Secretary of State said that my hon. Friend was wrong about recycling. My hon. Friend was not wrong; he was absolutely correct. Everything said by the Minister today has justified every word said by my hon. Friend. Clearly, it was the Secretary of State who did not understand his own brief.
The treasurer of Somerset county council has estimated that the size of the grant that will be lost in 1987–88 will be over £400 million. This compares with £592 million that would have been lost to English authorities if there had been no grant recycling in 1986–87. It is like management offering its work force a rise of between £8 and £12 during wage negotiations and the next day offering nothing because that removes uncertainty and allows the work force to redistribute its wages with, to use the Secretary of State's phrase, "much greater certainty."
The treasurer of Durham county council, Mr. Kingsley Smith, wrote to me on 13 January 1987. He is a highly respected and experienced chief officer. He wrote:
The only advantage will be that the present uncertainty about grant entitlement will be removed. However the cost of removing this uncertainty is prohibitive and I cannot imagine that there is a local authority treasurer in the country who would regard it as a reasonable price to pay.
Because of Mr. Smith's knowledge of the trade, I am certain that he reflects the anxieties of treasurers the length and breadth of England and Wales.
The Government are taxing local authority spending. They are robbing the authorities of cash which the authorities expect and to which they are entitled. That important aspect has been underlined by the county treasurer of Durham. He writes:


The point that needs to be emphasised is that the effect of this Bill will be that local authorities collectively will not receive the amount of grant that Parliament believes it is approving for local authorities in the annual rate support grant statement.
Local authorities are being denied cash which Parliament approves for them which they desperately need to deliver the services to the increasing number of people in their areas who need those services.
I want to consider what that means for a specific local authority. David Wishart, the treasurer of the borough of Sunderland, wrote to me about the Bill. He explained that Sunderland spends above its GREA and as a consequence of spending 11 per cent. above GREA it suffered a grant loss of £2·598 million in 1986£87. Based on the returns of estimated expenditure for 1986–87 from local authorities, Sunderland's share of the £628 million available for grant recycling would be £2·735 million, that is to say, £137,000 more than the grant lost. If a similar calculation is made for 1987–88 based on an estimated expenditure of 4·1 per cent. higher than the 1986–87 figure, and the borough spent 11·8 per cent. above GREA, it would lose £1·89 million. If grant recycling was ended, that £1·89 million and the total grant lost by the other local authorities would be retained by the Treasury. Of course, the Government's assumption that spending will increase by only 4·1 per cent is open to a big question. A treasurer told me that the assumption that expenditure would increase by only a little over 4 per cent. was "clearly ridiculous."
Mr. David Wishart ends his letter by stating:
In summarising I would wish to express concern at the Secretary of State's decision to abolish grant recycling, because of the possible effects on Sunderland and similar authorities.
I do not have time this evening to debate all the problems of Sunderland. Suffice it to emphasise that Sunderland has a large unemployment problem and the town has the highest unemployment rate in Great Britain. The Government aim to take away almost £2 million from that authority.

Mr. David Clelland: Does my hon. Friend agree that the city of Newscastle, in the metropolitan borough of Gateshead, stands to lose about £10 million as a result of these measures? These authorities share an inner area partnership. As a result of the Government's financial regime the authorities now have to reduce expenditure by more than twice as much as they will receive in inner area partnership grant. Does that not make nonsense of the Government's crocodile tears over the problems of the inner cities?

Mr. Boyes: My hon. Friend has made a telling and important point. Indeed, Newcastle could lose between £5 million and £9 million worth of grants, and his local authority—of which he was such a distinguished leader—may lose between £500,000 and £1·6 million. That money is badly needed in the areas that we represent.
The borough of Sunderland is greatly concerned about clause 1 (1)(b)(i), because it appears to be too wide in its literal sense. It suggests that the Secretary of State can ignore any information or data that become available. That appears to conflict with the requirement of section 65 of the Local Government, Planning and Land Act 1980, as amended by the Rate Support Grants Act 1986, which states that the information required from authorities in order to enable the Secretary of State to produce the rate support grant report must be received
in such form and by such date as he may specify".

I also want clarification about clause 1 (1)(b)(ii), which could have far-reaching implications. It would appear to give the Secretary of State the power to fix the aggregate amount of block grant available without having any regard to the amount so specified in the RSG settlement.
Clause 2 retrospectively corrects an illegality. The clause has been introduced to prevent adversely affected councils from seeking redress in the courts. The clause will turn out to be a legal minefield. It adds to a local government system created by the Government which is a shambles. The House has spent a considerable amount of time recently debating Bills concerned with retrospective legislaton which have had to be introduced because local authorities took the Government to court for acting illegally and won their cases. Each time we discussed the Bill, a Minister suggested that everything would now be all right.
At the end of the debate on the rates Support Grants Bill the Minister said:
We are about to pass a Bill which will clarify the law and make it what it was thought to be in a number of important technical respects in relation to rate support grant settlements."—[Official Report, 21 July 1986; Vol. 102, c. 150–;51.]
That was the Bill to end all Bills, but very soon we were considering other Bills, and this is the third Bill in quick succession on these matters.
The Secretary of State said in reply to a question from my hon. Friend the Member for Bootle (Mr. Roberts):
I am the only person who is quite certain what the law is."—[Official Report, 16 December 1986; Vol. 107, c. 1055.]
If the right hon. Gentleman is certain about the law, I do not understand why he wants to bring in three Bills— and no one can guess how many more might be introduced—to bring some sanity into the system.
If the Secretary of State understood the law so well, why did the Government have to introduce the Rate Support Grants Act 1986, the Local Government Finance Bill and this Rate Support Grants Bill? Every time that the Government have tried to introduce certainty, they have discovered greater uncertainty. How many more Bills will they introduce before they realise that there are so many problems with the present system that the only honourable thing to do is for the Government to pack their bags, be gone, and let the Opposition create a simple, easily understood and manageable local government system.

The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): We have had a full and, by and large, constructive debate this afternoon on what is a simple but important new measure designed to improve the operation of the present rate support grant system. Hon. Members have made interesting and largely relevant contributions. I have listened carefully to the views expressed and will do my best to respond to some of the key points that have been raised.
My hon. Friend the Minister for Local Government has eloquently explained already the need for the Bill and how it achieves its stated objectives, and I do not intend to repeat what he has already made clear. He has also explained the benefits which the Bill will confer on local authorities in terms of great stability and certainty, which explains why many authorities have welcomed the principles and purpose which lie behind it.
Some Opposition Members have raised the spectre of all sorts of misdeeds which they believe my right hon. Friend the Secretary of State may be trying to perpetrate


under cover of this apparently straightforward measure. I must tell Opposition Members that they are wrong. I am unable to say whether they are wrong through lack of understanding or lack of trust—or perhaps both.
The Bill is intended to abolish the practice of grant recycling, a procedure which has proved a hindrance to good management and sensible budgeting in local government. Local authorities which adopt sensible spending policies have nothing to fear from the provisions of the Bill. It is significant that most of the contributions from Opposition Members came from hon. Members representing high-spending authorities which wish to spend even more. The Bill has implications for such authorities. It will provide a tougher regime for those who choose to push up spending, and that I regard as a further positive advantage offered by the Bill. Hitherto, recycled grant has found its way back indiscriminately to high and low spenders alike. The very high-spending authorities whose spending decisions have reduced their grant entitlement, and have therefore contributed to an aggregate underclaim of grant, find themselves beneficiaries of recycling. Such a situation is unacceptable, and the Bill will bring it to an end.
I stress that the Bill will still allow local authorities to spend at levels of their own choice. However, it ensures that the consequences of their spending decisions, in terms of their entitlement to grant, are clear-cut and flow directly from, and only from, those decisions. The spending levels of other authorities have no bearing on an authority's grant entitlement. Overspending elsewhere will not affect that entitlement. This is important in promoting certainty as to grant entitlement at a very early stage, when budgets are being set and rate levels discussed, and in achieving a greater level of local accountability. Ratepayers will be able to see with the utmost clarity just what the effects of profligate spending are.

Mr. Heffer: What does "profligate spending" mean? Does it mean building homes and sports centres for the unemployed youth, or putting telephones into old people's homes?

Mr. Chope: If the hon. Gentleman had been present earlier today—

Mr. Heffer: I have been here all the time.

Mr. Chope: If the hon. Gentleman had been present this morning when I was addressing a seminar organised by the Local Government Chronicle, he would have been able to have the benefit of a detailed analysis of exactly how much money is being wasted unnecessarily in local government, and how much can be saved. We intend to make six particular services the subject of compulsory competitive tender. Even if only 10 per cent. savings are made on those services—that is a modest estimate having regard to the savings made by those authorities which have already gone in for competitive tendering— that will save £250 million. I do not expect to convince the hon. Gentleman about this, because I read in the newspapers that he regards the present Liverpool city council as the best that there has ever been in Liverpool. If that is his view, that shows how wide is the chasm between us and how difficult it will be to reach an understanding on these matters.
We have been asked when the Bill's provisions will apply. There will be no grant recycling in 1987–88, but for

the remainder of the financial year 1986–87 grant will continue to be recycled. The guarantees given by my right hon. Friend the previous Secretary of State that £500 million would be available in the first supplementary report for 1986–87 will be implemented when that report is made. That will be as soon as the Local Government Finance Bill has received Royal Assent. Some £618 million will be recycled by that report. However, that is only the first supplementary report in 1986–87, and subsequent supplementary reports will be produced in due course. I cannot comment about those.
The hon. Member for Norwood (Mr. Fraser) suggested that, on what he called a low estimate of the Bill's proposals, it would cause two thirds of a billion pounds to be lost. A higher estimate was that £1 billion would be lost. There is an amazing contrast between that and what the hon. Member for Copeland (Dr. Cunningham) has said. He suggested that the cost would be about £400 million. There is a lack of consistency here.
I am able to tell the House that both hon. Members are wrong. Their assumption is that local authorities will carry on massively overspending, and if that assumption is proved correct those authorities will forfeit grant. However, if local authorities do not go on massively overspending, the grant is theirs. They will not lose any grant if they increase spending overall in line with the settlement assumption, which, at 1·5 per cent. above inflation for non-rate-limited authorities, is realistic. Authorities will then be able to claim the full amount of grant available for them next year.
My hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) raised a number of interesting points, in particular his concern about consultation. No special consultation provision is necessary, because of the wide provisions available in part VI of the 1980 Act, which requires consultation on the contents of the rate support grant reports.
A number of comments have been made about clause 2 and the delineation of classes of authority. This delineation is used to enable different determination of GRE, grant-related poundage, multipliers and so on to be made for different types of authorities. This is necessary because of the different functions undertaken by different types of authorities. For example, county councils, metropolitan districts, outer London boroughs, ILEA and the Isles of Scilly are education authorities, while the shire districts, the inner London boroughs and the Common Council of the City of London are not. Our lawyers advise us that there is doubt about whether the definition of classes of authority is consistent throughout part VI, and that is why clause 2 seeks to put all those references on the same footing—that is, using the definitions in sections 53(5) of the 1980 Act, as modified by section 59(11) and schedule 1 to the Rates Support Grants Act 1986. I hope that that will allay some of the fears that have been expressed by Labour Members.
I had hoped that we would hear a bit more about the Labour party's proposals. As far as one can detect from what it has published so far, its proposals envisage the reintroduction of grant recycling and putting no local authority on a negative marginal rate of grant. This would mean that no authority would lose grant if it increased spending, and most would gain grant. That is not the end of what the Labour party says. It says that total grant would be cash-limited, and that means that additional grant would have to come from other authorities. We


would thus return to a situation where authorities which exercised good housekeeping would have to pay for the excesses of the high spenders. Labour would not be introducing grant recycling— it would be giving authorities more grant than they expected, but it would be introducing grant clawback, giving authorities less grant than they expected. This has severe implications for all local authorities living within their means and trying to budget sensibly.
The right hon. Member for Manchester, Wythenshawe (Mr. Morris) raised a number of detailed points about the disabled. I am as concerned as he is about the disabled. He did not refer to the principal issue that is one of the priorities for local government. His local authority of Manchester increased its number of employees on a full-time equivalent basis by 2,291 between June 1985 and June 1986. How many of those extra employees have been taken on to help the disabled?

Mr. Alfred Morris: With their very important responsibilities for local government finance, what consultations have Environment Ministers had with DHSS Ministers and the Treasury about the implications of the Disabled Persons (Services, Consultation and Representation) Act 1986? That is a very important question.

Mr. Chope: I shall write to the right hon. Gentleman in answer to that detailed point. Much of his speech was addressed to the implications of the Bill. He suggested that it would take money away from local authorities which would otherwise wish to spend it on the disabled. It is worth pointing out that in Wandsworth, between 1978 and 1985, despite prudent spending by that authority, there was a 27 per cent. increase in home helps and a 38 per cent. increase in the council's stock of sheltered accommodation. That shows that prudent spending is compatible with care for those in greatest need. I do not have time to deal with all the other detailed points raised in the course of the debate. This is an important Bill and deserves the support of the House.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 343, Noes 196.

Division No. 80]
[7 pm


AYES


Adley, Robert
Body, Sir Richard


Aitken, Jonathan
Bonsor, Sir Nicholas


Alexander, Richard
Bottomley, Peter


Alison, Rt Hon Michael
Bottomley, Mrs Virginia


Ancram, Michael
Bowden, A. (Brighton K'to'n)


Arnold, Tom
Bowden, Gerald (Dulwich)


Aspinwall, Jack
Boyson, Dr Rhodes


Atkins, Rt Hon Sir H.
Braine, Rt Hon Sir Bernard


Atkins, Robert (South Ribble)
Brandon-Bravo, Martin


Atkinson, David (B'm'th E)
Bright, Graham


Baker, Rt Hon K. (Mole Vall'y)
Brinton, Tim


Baker, Nicholas (Dorset N)
Brooke, Hon Peter


Baldry, Tony
Brown, M. (Brigg &amp; Cl'thpes)


Banks, Robert (Harrogate)
Browne, John


Batiste, Spencer
Bruinvels, Peter


Beaumont-Dark, Anthony
Bryan, Sir Paul


Bellingham, Henry
Budgen, Nick


Bendall, Vivian
Bulmer, Esmond


Benyon, William
Burt, Alistair


Best, Keith
Butler, Rt Hon Sir Adam


Bevan, David Gilroy
Butterfill, John


Biffen, Rt Hon John
Carlisle, Kenneth (Lincoln)


Biggs-Davison, Sir John
Carlisle, Rt Hon M. (W'ton S)


Blackburn, John
Carttiss, Michael


Blaker, Rt Hon Sir Peter
Cash, William





Chalker, Mrs Lynda
Heathcoat-Amory, David


Channon, Rt Hon Paul
Heddle, John


Chapman, Sydney
Henderson, Barry


Chope, Christopher
Heseltine, Rt Hon Michael


Clark, Hon A. (Plym'th S'n)
Hickmet, Richard


Clark, Dr Michael (Rochford)
Hicks, Robert


Clark, Sir W. (Croydon S)
Higgins, Rt Hon Terence L.


Clegg, Sir Walter
Hill, James


Cockeram, Eric
Hind, Kenneth


Colvin, Michael
Hirst, Michael


Coombs, Simon
Hogg, Hon Douglas (Gr'th'm)


Cope, John
Holland, Sir Philip (Gedling)


Corrie, John
Holt, Richard


Couchman, James
Hordem, Sir Peter


Cranborne, Viscount
Howard, Michael


Critchley, Julian
Howarth, Alan (Strati'd-on-A)


Crouch, David
Howarth, Gerald (Cannock)


Currie, Mrs Edwina
Howe, Rt Hon Sir Geoffrey


Dickens, Geoffrey
Howell, Rt Hon D. (G'ldford)


Dorrell, Stephen
Hubbard-Miles, Peter


Douglas-Hamilton, Lord J.
Hunt, John (Ravensbourne)


du Cann, Rt Hon Sir Edward
Hunter, Andrew


Dunn, Robert
Hurd, Rt Hon Douglas


Dykes, Hugh
Irving, Charles


Edwards, Rt Hon N. (P'broke)
Jackson, Robert


Eggar, Tim
Jenkin, Rt Hon Patrick


Emery, Sir Peter
Jessel, Toby


Evennett, David
Johnson Smith, Sir Geoffrey


Eyre, Sir Reginald
Jones, Gwilym (Cardiff N)


Fairbairn, Nicholas
Jones, Robert (Herts W)


Farr, Sir John
Key, Robert


Favell, Anthony
King, Roger (B'ham N'tield)


Fenner, Dame Peggy
King, Rt Hon Tom


Finsberg, Sir Geoffrey
Knight, Greg (Derby N)


Fletcher, Sir Alexander
Knight, Dame Jill (Edgbaston)


Fookes, Miss Janet
Knowles, Michael


Forman, Nigel
Knox, David


Forsyth, Michael (Stirling)
Lamont, Rt Hon Norman


Forth, Eric
Lang, Ian


Fowler, Rt Hon Norman
Latham, Michael


Fox, Sir Marcus
Lawler, Geoffrey


Franks, Cecil
Lawrence, Ivan


Fraser, Peter (Angus East)
Lawson, Rt Hon Nigel


Freeman, Roger
Lee, John (Pendle)


Fry, Peter
Leigh, Edward (Gainsbor'gh)


Gale, Roger
Lennox-Boyd, Hon Mark


Galley, Roy
Lightbown, David


Gardiner, George (Reigate)
Lilley, Peter


Gardner, Sir Edward (Fylde)
Lloyd, Sir Ian (Havant)


Garel-Jones, Tristan
Lloyd, Peter (Fareham)


Glyn, Dr Alan
Lord, Michael


Goodhart, Sir Philip
Luce, Rt Hon Richard


Goodlad, Alastalr
Lyell, Nicholas


Gorst, John
Macfarlane, Neil


Gow, Ian
MacGregor, Rt Hon John


Gower, Sir Raymond
MacKay, Andrew (Berkshire)


Grant, Sir Anthony
MacKay, John (Argyll &amp; Bute)


Greenway, Harry
Maclean, David John


Gregory, Conal
McLoughlin, Patrick


Griffiths, Sir Eldon
McNair-Wilson, M. (N'bury)


Griffiths, Peter (Portsm'th N)
McNair-Wilson, P. (New F'st)


Grist, Ian
McQuarrie, Albert


Ground, Patrick
Madel, David


Grylls, Michael
Major, John


Gummer, Rt Hon John S
Malone, Gerald


Hamilton, Hon A. (Epsom)
Maples, John


Hamilton, Neil (Tatton)
Marland, Paul


Hampson, Dr Keith
Marshall, Michael (Arundel)


Hannam, John
Mather, Sir Carol


Hargreaves, Kenneth
Maude, Hon Francis


Harris, David
Mawhinney, Dr Brian


Harvey, Robert
Maxwell-Hyslop, Robin


Haselhurst, Alan
Mayhew, Sir Patrick


Havers, Rt Hon Sir Michael
Mellor, David


Hawkins, C. (High Peak)
Merchant, Piers


Hawkins, Sir Paul (N'folk SW)
Meyer, Sir Anthony


Hawksley, Warren
Miller, Hal (B'grove)


Hayes, J.
Mills, Iain (Meriden)


Hayhoe, Rt Hon Sir Barney
Mills, Sir Peter (West Devon)


Hayward, Robert
Miscampbell, Norman






Mitchell, David (Hants NW)
Smith, Tim (Beaconsfield)


Moate, Roger
Soames, Hon Nicholas


Monro, Sir Hector
Speller, Tony


Montgomery, Sir Fergus
Spencer, Derek


Moore, Rt Hon John
Spicer, Jim (Dorset W)


Morris, M. (N'hampton S)
Spicer, Michael (S Worcs)


Morrison, Hon C. (Devizes)
Squire, Robin


Morrison, Hon P. (Chester)
Stanbrook, Ivor


Moynihan, Hon C.
Stanley, Rt Hon John


Mudd, David
Stern, Michael


Murphy, Christopher
Stevens, Lewis (Nuneaton)


Neale, Gerrard
Stewart, Allan (Eastwood)


Nelson, Anthony
Stewart, Andrew (Sherwood)


Neubert, Michael
Stewart, Ian (Hertf'dshire N)


Newton, Tony
Stokes, John


Nicholls, Patrick
Stradling Thomas, Sir John


Normanton, Tom
Sumberg, David


Norris, Steven
Tapsell, Sir Peter


Onslow, Cranley
Taylor, John (Solihull)


Oppenheim, Phillip
Taylor, Teddy (S'end E)


Oppenheim, Rt Hon Mrs S.
Tebbit, Rt Hon Norman


Osborn, Sir John
Temple-Morris, Peter


Ottaway, Richard
Terlezki, Stefan


Page, Sir John (Harrow W)
Thatcher, Rt Hon Mrs M.


Page, Richard (Herts SW)
Thomas, Rt Hon Peter


Parkinson, Rt Hon Cecil
Thompson, Donald (Calder V)


Patten, J. (Oxf W &amp; Abgdn)
Thompson, Patrick (N'ich N)


Pawsey, James
Thorne, Neil (Word S)


Peacock, Mrs Elizabeth
Thornton, Malcolm


Percival, Rt Hon Sir Ian
Thurnham, Peter


Pollock, Alexander
Townend, John (Bridlington)


Porter, Barry
Townsend, Cyril D. (B'heath)


Portillo, Michael
Tracey, Richard


Powell, William (Corby)
Trippier, David


Powley, John
Trotter, Neville


Price, Sir David
Twinn, Dr Ian


Prior, Rt Hon James
van Straubenzee, Sir W.


Proctor, K. Harvey
Vaughan, Sir Gerard


Rafian, Keith
Waddington, Rt Hon David


Rathbone, Tim
Wakeham, Rt Hon John


Rees, Rt Hon Peter (Dover)
Walden, George


Renton, Tim
Walker, Bill (T'side N)


Rhodes James, Robert
Wall, Sir Patrick


Rhys Williams, Sir Brandon
Waller, Gary


Ridley, Rt Hon Nicholas
Walters, Dennis


Ridsdale, Sir Julian
Ward, John


Rifkind, Rt Hon Malcolm
Wardle, C. (Bexhill)


Rippon, Rt Hon Geoffrey
Warren, Kenneth


Roberts, Wyn (Conwy)
Watson, John


Robinson, Mark (N'port W)
Watts, John


Roe, Mrs Marion
Wells, Sir John (Maidstone)


Rossi, Sir Hugh
Wheeler, John


Rost, Peter
Whitfield, John


Rowe, Andrew
Whitney, Raymond


Rumbold, Mrs Angela
Wiggin, Jerry


Ryder, Richard
Wilkinson, John


Sackville, Hon Thomas
Winterton, Mrs Ann


Sainsbury, Hon Timothy
Winterton, Nicholas


Sayeed, Jonathan
Wolfson, Mark


Scott, Nicholas
Wood, Timothy


Shaw, Giles (Pudsey)
Woodcock, Michael


Shaw, Sir Michael (Scarb')
Yeo, Tim


Shelton, William (Streatham)
Young, Sir George (Acton)


Shepherd, Colin (Hereford)
Younger, Rt Hon George


Shepherd, Richard (Aldridge)



Shersby, Michael
Tellers for the Ayes:


Silvester, Fred
Mr. Robert Boscawen and


Sims, Roger
Mr. Tony Durant.


Skeet, Sir Trevor





NOES


Abse, Leo
Banks, Tony (Newham NW)


Adams, Allen (Paisley N)
Barron, Kevin


Alton, David
Beckett, Mrs Margaret


Anderson, Donald
Beith, A. J.


Archer, Rt Hon Peter
Bell, Stuart


Ashley, Rt Hon Jack
Benn, Rt Hon Tony


Ashton, Joe
Bidwell, Sydney


Atkinson, N. (Tottenham)
Blair, Anthony


Bagier, Gordon A. T.
Boothroyd, Miss Betty





Boyes, Roland
Hughes, Roy (Newport East)



Bray, Dr Jeremy
Hughes, Sean (Knowsley S)


Brown, Gordon (D'f'mline E)

Janner, Hon Greville


Brown, Hugh D. (Provan)
Jenkins, Rt Hon Roy (Hillh'd)


Brown, N. (N'c'tle-u-Tyne E)
John, Brynmor


Brown, R. (N'c'tle-u-Tyne N)
Jones, Barry (Alyn &amp; Deeside)


Brown, Ron (E'burgh, Leith)
Kaufman, Rt Hon Gerald


Bruce, Malcolm
Kirkwood, Archy


Buchan, Norman
Lambie, David


Caborn, Richard
Lamond, James


Callaghan, Jim (Heyw'd &amp; M)
Leadbitter, Ted


Campbell, Ian
Leighton, Ronald


Campbell-Savours, Dale
Litherland, Robert


Canavan, Dennis
Livsey, Richard


Carlile, Alexander (Montg'y)
Lloyd, Tony (Stretford)


Carter-Jones, Lewis
Lofthouse, Geoffrey


Clark, Dr David (S Shields)

Loyden, Edward


Clarke, Thomas
McCartney, Hugh


Clay, Robert
McDonald, Dr Oonagh


Clelland, David Gordon
McGuire, Michael


Clwyd, Mrs Ann
MacKenzie, Rt Hon Gregor


Cocks, Rt Hon M. (Bristol S)
Maclennan, Robert


Cohen, Harry
McTaggart, Robert


Coleman, Donald
McWilliam, John


Conlan, Bernard
Madden, Max


Cook, Frank (Stockton North)
Marek, Dr John


Cook, Robin F. (Livingston)
Marshall, David (Shettleston)


Corbett, Robin
Martin, Michael


Cox, Thomas (Tooting)
Mason, Rt Hon Roy


Craigen, J. M.
Maxton, John


Crowther, Stan
Maynard, Miss Joan


Cunliffe, Lawrence
Meacher, Michael


Cunningham, Dr John
Meadowcroft, Michael


Dalyell, Tam
Michie, William


Davies, Rt Hon Denzil (L'lli)
Mikardo, Ian


Davis, Terry (B'ham, H'ge H'l)
Millan, Rt Hon Bruce


Deakins, Eric
Mitchell, Austin (G't Grimsby)


Dixon, Donald
Morris, Rt Hon A. (W'shawe)


Dobson, Frank
Morris, Rt Hon J. (Aberavon)


Dormand, Jack
Nellist, David


Douglas, Dick
Oakes, Rt Hon Gordon


Dubs, Alfred
O'Neill, Martin


Duffy, A. E. P.
Orme, Rt Hon Stanley


Dunwoody, Hon Mrs G.
Owen, Rt Hon Dr David


Eadie, Alex
Park, George


Eastham, Ken
Parry, Robert


Evans, John (St. Helens N)
Patchett, Terry


Fatchett, Derek
Pavitt, Laurie


Faulds, Andrew
Pendry, Tom


Field, Frank (Birkenhead)
Pike, Peter


Fields, T. (L'pool Broad Gn)
Powell, Raymond (Ogmore)


Fisher, Mark
Prescott, John


Flannery, Martin
Radice, Giles


Foot, Rt Hon Michael
Randall, Stuart


Forrester, John
Raynsford, Nick


Foster, Derek
Redmond, Martin


Fraser, J. (Norwood)
Rees, Rt Hon M. (Leeds S)


Freeson, Rt Hon Reginald
Richardson, Ms Jo


Garrett, W. E.
Roberts, Allan (Bootle)


Gilbert, Rt Hon Dr John
Roberts, Ernest (Hackney N)


Godman, Dr Norman
Robertson, George


Golding, Mrs Llin
Robinson, G. (Coventry NW)


Gourlay, Harry
Rogers, Allan


Hamilton, James (M'well N)
Rooker, J. W.


Hamilton, W. W. (Fife Central)
Ross, Ernest (Dundee W)


Hancock, Michael
Ross, Stephen (Isle of Wight)


Hardy, Peter
Rowlands, Ted


Harrison, Rt Hon Walter
Sedgemore, Brian


Hart, Rt Hon Dame Judith
Sheerman, Barry


Haynes, Frank
Sheldon, Rt Hon R.


Healey, Rt Hon Denis
Shore, Rt Hon Peter


Heffer, Eric S.
Short, Ms Clare (Ladywood)


Hogg, N. (C'nauld &amp; Kilsyth)
Short, Mrs ft.(W'hampt'n NE)


Holland, Stuart (Vauxhall)
Silkin, Rt Hon J.


Home Robertson, John
Skinner, Dennis


Howarth, George (Knowsley, N)
Smith, C.(lsl'ton S &amp; F'bury)


Howell, Rt Hon D. (S'heath)
Smith, Rt Hon J. (M'ds E)


Howells, Geraint
Soley, Clive


Hoyle, Douglas
Spearing, Nigel


Hughes, Robert (Aberdeen N)

Steel, Rt Hon David






Stott, Roger
Weetch, Ken


Strang, Gavin
Welsh, Michael


Thomas, Dr R. (Carmarthen)
White, James


Thompson, J. (Wansbeck)
Wigley, Dafydd


Thorne, Stan (Preston)
Williams, Rt Hon A.


Tinn, James
Winnick, David


Torney, Tom
Wrigglesworth, Ian


Wainwright, R.



Wallace, James
Tellers for the Noes:


Wardell, Gareth (Gower)
Mr. Ron Davies and


Wareing, Robert
and Mr. Allen McKay.

Question accordingly agreed to.
Bill read a Second time and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

RATE SUPPORT GRANTS BILL [MONEY]

Queen's Recommendations having been signified—

Resolved,
That, for the purposes of any Act resulting from the Rate Support Grants Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the provisions of that Act in the sums payable out of money so provided under any other enactment.— [Mr. Maude.]

Orders of the Day — Security (Search Warrants)

Dr. David Owen: On a point of order, Mr. Deputy Speaker. I am grateful to the Leader of the House for staying in his place. There is a rumour going around that the Solicitor-General for Scotland is about to issue a statement clarifying what took place in the House yesterday and what was said in another place today. It will be within the memory of the House that the Secretary of State for Scotland, in answer to an intervention that I made, said:
as with any Law Officer, in these circumstances the Lord Advocate does not have a dual role—he has a single role as a Law Officer. Secondly, the width of any warrant sought is a matter not for the police or for the Lord Advocate but for the courts.
The Solicitor-General for Scotland, when discussing the responsibilities of the Lord Advocate to secure the search warrant, said:
He is there to ensure that, first, the warrant is sufficient to meet its purposes and, secondly, to ensure that it does not go beyond what is required."—[Official Report, 3 February 1987; Vol. 109, c. 852–57.]
There is a clear incompatibility between those statements. There has been a further statement in answer to a question from Lord Wilson of Langside, himself a former Lord Advocate, in another place. Frankly, it appears that there now is considerable confusion.
The substantial point is that clarification of the confusion should not be made in three different statements by Scottish Office Ministers. Surely the clarification should be made in the House. As the term "Law Officer" has been used in this matter, it impacts upon the responsibilities of the Attorney-General. With respect, Mr. Deputy Speaker, it would be of great convenience if the Leader of the House will at least assure hon. Members that, on a matter for the House of Commons, no clarification will be made outside the House of Commons and that that should be done at the earliest possible moment.

Mr. Deputy Speaker (Sir Paul Dean): The right hon. Gentleman has made his point. I am sure that it will be noted. I am sure also that he realises that it is not a matter for the Chair.

Mr. Bruce Millan: Further to the point of order, Mr. Speaker. It was I who, from the Opposition Benches, first raised the issue during the debate yesterday and asked the Secretary of State to make a clarification there and then. Have you, Mr. Deputy Speaker, had any sign from the Leader of the House or from the Secretary of State for Scotland that we will have a clarification? It is unsatisfactory that this matter, which was crucial to yesterday's debate, was not satisfactorily answered by Ministers. In effect, there was a refusal to answer. The answer was perfectly clear by implication. There was a statement today by the Lord Advocate, in another place, although the Solicitor-General for Scotland was here yesterday, together with the Attorney-General, not to mention the Secretary of State for Scotland who wound up the debate. The matter could have been clarified here yesterday during the debate. Surely, in those circumstances, we are entitled to some response from the Leader of the House at least.

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I am not aware that there is an inconsistency, but I shall certainly look at the point that has been raised.

Orders of the Day — Parliamentary and Health Service Commissioners Bill

Order for Second Reading read.

The Minister of State, Privy Council Office (Mr. Richard Luce): I beg to move, That the Bill be now read a Second Time.
I am sure that hon. Members will recognise this Bill as a valuable measure and I hope that it will receive support from all hon. Members. Its main aim is to implement the Government's undertaking, given in 1985, to introduce legislation to extend the powers of the Parliamentary Commissioner for Administration to enable him to investigate the activities of non-departmental public bodies, commonly known as quangos, as well as those of Government Departments. It is now almost exactly 20 years since the office of the Parliamentary Commissioner— the first United Kingdom Ombudsman— was established to look into complaints of maladministration against Government Departments. It is perhaps surprising now to recall the doubts expressed at the time about the wisdom of this action and, in particular, whether the Parliamentary Commissioner's activities might not undermine the role of hon. Members in pursuing complaints. The experience of the last 20 years has shown the great value of his role. I am sure that most hon. Members will agree that his investigations have actually strengthened the ability of hon. Members to protect the individual against administrative abuse. I take this chance to commend the Ombudsman, Mr. Anthony Barrowclough, and his staff for the painstaking job that they do.
Hon. Members will recall that the Select Committee on the Parliamentary Commissioner for Administration recommended this extension of jurisdiction in its report on non-departmental public bodies in the 1983–84 Session. This was an area that the Select Committee had explored some years previously but had delayed making final recommendations until the Government's review on the nature and number of these quangos had been concluded. In its report the Select Committee made clear its view that it would not be appropriate for all quangos to be included and gave considerable thought to the precise bodies to be covered. We must all be grateful for the valuable work of the Committee in mapping out guidelines in this new field under the chairmanship of my hon. and learned Friend the Member for Colchester, North (Sir A. Buck).
In their response, published in July 1985, the Government pointed out that the Select Committee had put forward no evidence of significant maladministration by any of the bodies recommended for inclusion in the PCA's jurisdiction. Nevertheless, the Government accepted that there was a case in principle for extending the PCA's jurisdiction in this way, subject to some further observations on the criteria for defining the bodies which it was appropriate to bring within jurisdiction. We undertook to introduce legislation in due course to implement the proposals—hence this Bill.
The meat of the Bill, dealing with the extension of PCA jurisdiction to quangos, is in clause 1 and the schedule attached to it. Hon. Members will need to note that all provisions of the Parliamentary Commissioner Act 1967


apply unchanged to the new bodies, with the exception of the amendment which specifies the bodies that the PCA may investigate.
The existing non-departmental public bodies which it is proposed to bring within jurisdiction are listed in the schedule. The clause provides that further bodies may be added to the schedule in future. It also lays down for parliamentary approval the criteria that such bodies will have to satisfy in order to be listed. These reflect essentially the concept that the bodies should be subject to some degree of ultimate ministerial accountability to Parliament, in that they are dependent for their financing and continuing existence on Government policy.
While this extension of the PCA's jurisdiction is the main purpose of the Bill, we have taken the opportunity to bring forward one or two other useful amendments to existing legislation. First, clauses 2 and 4 propose some changes that are designed to ensure the smooth running of the PCA's or the Health Service Commissioner's office, should it be left unexpectedly without a commissioner. Clause 2 provides for the removal of a commissioner who, possibly through accident or illness, is incapable of carrying out his duties but is so severely incapacitated as to be unable to offer his resignation. The present Acts provide no remedy in such an event, except removal after addresses by both Houses of Parliament—an insensitive and inappropriate procedure.
Clause 4 provides for the appointment of an acting commissioner, should the offices of the PCA or any of the .Health Service Commissioners become vacant. The appointment of a new commissioner necessarily takes some time, and while the position remains vacant some important functions, including the presentation to Parliament of reports on completed cases, cannot be carried out. I must stress particularly that both these clauses are precautionary measures to meet an unlikely situation, but should either unwelcome event occur the continuing work of the PCA and the Health Service Commissioner offices would be hampered without them.
In addition, clause 3 introduces a provision to allow Health Service Commissioner reports to be passed to Members of Parliament who have been involved in a complaint. The Health Service Commissioner has felt unable to pass his reports to hon. Members under legislation establishing the offices of Health Commissioners, even where an hon. Member has been instrumental in assisting a constituent, on the grounds that the reports would not be privileged in such circumstances. He has recommended, and the Select Committee has endorsed his view, that this position should be remedied. The Bill provides a convenient opportunity.
Clauses 5 and 6 bring in some changes to the time limits and procedures for complaints to the Health Service Commissioners. The main effect is to extend from three to 12 months the period within which a health authority in England or Wales may itself refer a complaint to the Health Service Commissioner. The Health Service Commissioner considers, and the Select Committee has agreed, that this period is too short and that the longer period, which is already specified in the parallel Scottish legislation, is more appropriate.
In addition to its major provisions, the Bill therefore provides the opportunity to introduce a number of additional modest but useful changes to improve the

effectiveness of existing legislation. In all, I think that this is a useful Bill and I hope that it will command general support. I commend it to the House.

Mr. Frank Dobson: There is little likelihood of there being much dispute about whether the Bill ought to be given a Second Reading. Most hon. Members regard it as a relatively meritorious Bill. It is worth reminding those hon. Members who are present that the first British ombudsman— the Parliamentary Commissioner—was created by the Labour party. We welcome any improvement on the scope of that office and on the scope and functioning of the Health Service Commissioner's office. However, we do not think that the Bill goes far enough.
Opposition Members, who believe that a substantial number of services should be provided by public bodies, feel under a greater obligation to make provision for the proper redress of grievances than do Conservative Members, who would prefer to do without public bodies altogether and to privatise everything. Therefore, it is important that those who believe in public services should provide for the redress of grievances.
I intend to concentrate on the functions of the Health Service Commissioner rather than on his functions as Parlimentary Commissioner. My hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown) will be concentrating on his activities as Parliamentary Commissioner.
After the Parliamentary Commissioner's report to the Select Committee, it was agreed that his jurisdiction should be extended. However, there are a few curious omissions from the list of bodies that were originally recommended for inclusion. Why the Medical Research Council is to be covered by the Parliamentary Commissioner but the Economic and Social Research Council is not is beyond my grasp. I hope that the Minister will be able to explain that to us. It is also strange that the Scottish Special Housing Association should have been recommended for inclusion but was then excluded by the Government. I shall say no more about these oddities. I am sure that my hon. Friend the Member for Newcastle upon Tyne, East will refer to some more.
A few of the general points that I wish to make spring from long-held personal feelings. I am dubious about the fact that the Parliamentary Commissioner's office is staffed by seconded civil servants. The arrangement in local commissioners' offices, under which people have to apply for a job, obtain it and then go on to the payroll, is superior.

Mr. Nicholas Soames: The hon. Gentleman says that he thinks it odd that the Parliamentary Commissioner's office is staffed by civil servants. I am sure that he does not mean to imply that they do not do a thoroughly good job.

Mr. Dobson: No; they do a throughly good but rather slow job. As they are seconded from the Civil Service, they are open to the criticism that during their investigations they may be influenced by the thought that eventually they may have to return to the poachers, having abandoned their gamekeeping role. We shall need to consider that point.
It is also a fault that the PCA's office employs no lawyers of its own. I am no advocate of the widespread


employment of lawyers, despite the fact that I represent Lincoln's Inn and Gray's Inn, which are in my constituency. The Parliamentary Commissioner's office relies on Treasury solicitors for legal advice, which leads to the possibility of Treasury solicitors advising the poacher and the gamekeeper, because Treasury solicitors could be advising the Department complained against and the PCA's office investigating the complaint. There is some dubiety about that arrangement.

Mr. Alex Carlile: Does not the hon. Gentleman think that he is being a little grudging to the present Parliamentary Commissioner and his predecessor, who were distinguished lawyers? Does he accept that the independently minded Parliamentary Commissioner would not look for one moment at partisan advice from the Treasury Solicitor?

Mr. Dobson: I believe that the hon. Gentleman is a lawyer. Presumably, by his intervention, he is saying that all parliamentary commissioners should be lawyers because they alone will introduce an independent legal element into the office. That seems to be a bit of an absurdity. I do not think that it meets my point.
We cannot expect the Parliamentary Commissioner himself—who has other functions—to mull over detailed legal points which may arise when cases are first submitted for consideration, whether or not they are appropriate for an investigation. That should not be his normal function.
It was a retrograde step—this is to do with the Select Committee, not the Parliamentary Commissioner— to abandon the practice of publishing all the commissioners' reports. The reports should be available and on record. The investigation of complaints is partly carried out to provide proper satisfaction and redress for people who have individual grievances. But, in addition, in many organisations— certainly in well-run commercial organisations— the logging and subsequent analysis of complaints is used to identify patterns of things going wrong in terms of where problems are located, which departments are slipping up and whether a particular procedure appears to be leading to problems. The non-publication of the reports inhibits the proper practice within departments of looking at all the reports to see whether patterns can be discerned so that steps can be taken to prevent problems from arising.

Sir Antony Buck: The hon. Gentleman has raised an interesting point. Does he agree, however, that any report can be published? The report goes to the Member of Parliament, who, with the agreement of his constituent, can publish it. A summary of the departments involved is included in the various reports made by the Parliamentary Commissioner for Administration. One can keep tabs on the number of complaints made against any particular Department, which enables the Committee, of which I have the privilege to be Chairman, to keep tabs on the situation and see what the most sensitive matters are.

Mr. Dobson: I accept the latter point made by the distinguished Chairman of the Select Committee that summaries are available, but it would be better if the whole reports were available. No one will have the opportunity

to analyse and discern any patterns or recurrent behaviour, just because individual Members of Parliament may publish the reports that they receive.
If there is anything secretive about the PCA's office, the Health Service Commissioner's office is much worse. Sometimes we have to assume that the office must be doing good by stealth. Although I welcome the proposal in the Bill that in future the Health Service Commissioner should disclose reports to Members of Parliament when they have been involved in the submission of a complaint against the Health Service, I think that the practice in the local ombudsman's office— in line with the Local Government Act 1974— would be well applied to the Health Service.
When the local ombudsman issues a report about something that has happened in a local authority, the authority is obliged to make that report available to the public and advertise in local newspapers that it is available to the public. That obligation should be placed on the health authorities, because it is possible now for a report to be made on a health authority, and for no one other than a limited number of members of the authority, or even officers of the authority, to know that a complant has been received, examined and reported on. It would be to everyone's advantage if those reports were to be published.
There are wider criticisms of the complaints machinery within the National Health Service that are not the responsibility of the Select Committee or the Health Service Commissioner. Anybody faced with a complaint about aspects of their health treatment practically needs legal advice to know where to register their complaint.
The family practitioner committees are not subject to the jurisdiction of the Health Service Commissioner. The service committees of the family practitioner committees are a more confusing group of bodies than the family practitioner committees. People may complain to the General Medical Council, to the district health authority or to the Health Service Commissioner, but, if it is a complaint about clinical matters, the commissioner cannot entertain that complaint—there is the further possibility of taking legal action against a health authority.
Despite the fact that I represent the inhabitants of Gray's Inn and Lincoln's Inn, the last thing that I want to develop in the Health Service is more litigation, which would be expensive and harmful and stifle the spread of medical knowledge. If people think that their honest thoughts may be pursued by someone in the courts, they are less likely to tell their professional colleagues, either by learned papers or in a conference, the reiason that X and Y went wrong during a fatal or damaging operation.
All Health Service staff, especially the, doctors, should support the wide scope of the Health Service Commissioner in relation to their activities. Family practitioner committees provide 90 per cent of the service provided by the National Health Service to people in Britain. The Health Service Commissioner might be described as Mr. Ten Per Cent., because he can investigate only about 10 per cent. of the complaints of the activities of the National Health Service. That is fundamentally unsound, it would be sound to extend his jurisdiction over family practitioner committees.
The Labour party believes that the Health Service Commissioner's scope should be extended to cover clinical matters; not to challenge clinical judgment— although that is increasingly happening in the courts at great


expense—but so that no one can hide behind the claim that some maladministration within his part of the Health Service was the exercise of clinical judgment.
The Health Service Commissioner before last explained that his office would be capable of carrying out investigations involving clinical aspects of health care, that that would be subject to safeguards and that it would be necessary from time to time to call on expert advice. He said, properly, that he could explain what could be done and that it was up to the likes of us— Members of Parliament— to decide what should be done. Labour Members think that the Health Service Commissioner's activities should be extended to include matters of clinical judgment.
The Labour party believes that the Health Service Commissioner should be able to initiate investigations in some circumstances when no specific complaint has been received and when a matter is brought to the commissioner's attention which suggests to him that it is of significant public importance and that there is a likelihood of maladministration and injustice having occurred but no formal complaint has been received. That would be a useful, sensible development. The various propositions which I have put forward in favour of extending the Health Service Commissioner's jurisdiction in various ways—many of which have been counselled by people who gave evidence to the Select Committee and few of which, if any, have been rejected by the Committee—would be in the interests not just of patients but of professional staff, I believe, if only because of my general fear of the gradual development of harmful litigation in the Health Service.
I turn to John Milton's statement about complaints:
when complaints are freely heard, deeply considered, and speedily reformed, then is the utmost bound of civil liberty attained".
That is true. We need systems that are open and make complaining easy. We need to make people feel that they can draw attention to shortcomings. We need to make people confident that, when they think that something has gone wrong, it will be properly considered. We need to make people confident that, if injustice has been done to them, it will be remedied in so far as that is possible. I believe, even if I have been a little critical, that the offices of the various ombudsmen attempt to discharge that task. Any shortcomings in any of the offices spring not from those who work there but from our failure to give them the necessary powers to do the more extended tasks which would be an asset to us all.

Sir Antony Buck: I am glad to follow the hon. Member for Holborn and St. Pancras (Mr. Dobson). I shall take up two points that he raised before I make my contribution on the generality of the measure.
First, the hon. Gentleman talked of the possibility of clinical judgment being brought within the purview of the Health Service Commissioner. The Select Committee on the Parliamentary Commissioner for Administration, of which I have the honour to be Chairman, carefully considered that aspect. I have some sympathy with the hon. Gentleman's comments. The Select Committee recommended some years ago that the HSC should not be debarred if there was an element of clinical judgment.
I am bound to say that from time to time the medical profession rather overstates its case. One case which came

before the HSC and under our scrutiny involved an old lady of nearly 100 who was moved from hospital A to hospital B. My hon. Friend the Member for Eastbourne (Mr. Gow) was a distinguished member of that Select Committee and will remember the case well. Certain medical dramatis personae had the nerve to suggest that it was a matter of clinical judgment whether a person of nearly 100 should be moved from hospital A to hospital B at dead of night, when in fact a bed was available in hospital A and the lady need never have been moved. She died soon after. With the help of my hon. Friend the Member for Eastbourne, the Select Committee gave the medical authorities a fairly tough time.
I have a certain sympathy, therefore, with the suggestion that the Parliamentary Commissioner should not automatically be debarred if there is an element of clinical judgment. When a case involves pure clinical judgment, it is probably a matter for the British Medical Association or the medical authorities. Because of the Select Committee's recommendations, the complaints system in the Health Service was altered. Internal investigations of one authority are now carried out by another authority. We shall have to wait a little to see whether the present system works properly. The Select Committee will wish to return to this subject a little later.
Secondly, the hon. Member for Holborn and St. Pancras said that the Parliamentary Commissioner should be able to investigate of his own accord, and I have a certain sympathy with that view. I submit that there is a way to get over the difficulty. I have said to successive ombudsmen that if, during an investigation, a matter causes them difficulty and they are worried about it, they could well have a word with me as Chairman of the Select Committee or with one of the distinguished Opposition Members who serve on it and we may instigate an investigation.
I suggest that the Bill's proposals are an appropriate amendment to the ombudsman system. This system was created by the Parliamentary Commissioner Act 1967 and is something of a success story. The Bill reveals the way in which we are prepared to take institutions that have their roots in other countries and adopt and utilise them within our constitution so that our constituents are better served.
I served on the Standing Committee on the legislation that set up the ombudsmen system. At that time the objection was aired that the creation of the ombudsmen system might detract from the position of Members of Parliament. More than one of the foreign witnesses who gave evidence at our Select Committee's later investigation pointed out that every Member of Parliament is, according to some international definition, an ombudsman because Members of Parliament take up cases. The Committee, in preparing its report after the system had been in existence for 10 years, found that about 10,000 constituency cases a year were taken up by Members of Parliament with various Government Departments. Perhaps my right hon. Friend the Minister will give us the updated figures. Every Member of Parliament is, by some international definition, an ombudsman, and long may that continue.
The creation of the ombudsman system has put a further bolt in the armoury of Members of Parliament to look after our constituents. A typical case for a Member of Parliament at our surgeries and advice bureaux involves pensions. Mr. X, a constituent, thinks that he is not getting as much as Mr. Y down the road, so he goes to the local


pensions office. He sees a clerk, who may have had a tough morning and who tries to explain as well as he is able, but does not get over to Mr. X, the significance of the difference between the pensions. The constituent goes away dissatisfied. The constituent then comes to see a Member of Parliament and as far as I am concerned I may well not know the answer off the cuff because, like Randolph Churchill, every time I see a decimal point I think of "those damned dots." I am therefore unlikely to be able to solve the problem, but I will take it up with the local office, and in the vast majority of cases it will then be resolved to my satisfaction and that of the constituent. If I can understand it, the constituent will certainly be able to do so.
Once in a while, however, one takes up a case with the local office and finds that things have not gone properly and it seems that there is something of a cover-up mechanism. Before the creation of the ombudsman one would have taken it up with the Minister, but now it can be referred to the ombudsman and he can, and does, do that which we cannot do and cannot even force Ministers to do. He can go through the books with a fine-toothed comb and report to the Member of Parliament, and thus the matter is resolved to the satisfaction of the Member of Parliament and of the constituent.

Mr. J. F. Pawsey: rose—

Sir Antony Buck: I am glad to give way to my hon. Friend, who does such excellent service on our Select Committee.

Mr. Pawsey: On the point about Members of Parliament acting as ombudsmen, does my hon. and learned Friend agree that any move towards proportional representation would much reduce the link between the individual Member of Parliament and his constituents? Does he therefore agree that any move in that direction would be entirely reprehensible?

Sir Antony Buck: That rather widens the scope of the discussion, but I have always thought that one of the principal arguments against proportional representation is the abolition, which almost inevitably takes place, of the individual, personalised constituency Member of Parliament, whereby an elector knows who his Member of Parliament is and can go and see him, so I think that that is a valid point. However, as we must deal with these things even-handedly, it is interesting to note that if one did away with the constituency Member of Parliament one would probably have to extend the ombudsman system vastly. A country which has got absolutely perfect PR on paper is Israel, and when one talked to Mr. Nebenzahl, who used to be the doyen of ombudsmen, one found that ombudsman rule had almost been substituted for Member of Parliament rule. Devoted as I am to the ombudsman system, I think that it is the job of the elected representatives, not to rule, but certainly to supervise government and be responsible for it.
I am obliged to my hon. Friend for his intervention, although it has taken me farther away from the terms of the Bill than I had intended.
One of the recommendations that we made as a Select Committee which has not been accepted is that there should be a regular annual debate in the House on the

work of the Parliamentary Commissioner. Because of my having been lucky in the draw for private Members' notices of motion we have from time to time been able to subject the ombudsman system to parliamentary scrutiny, but I urge the Government to look again at that recommendation, which is on the periphery of the matters which are before us now.
If the ombudsman system is, as I have said, a success story, it is because of the way in which it has been framed and also—this gives me an opportunity to pay a tribute to them— because of the skill and total integrity and efficiency of successive ombudsmen. The first ombudsman, Sir Edmund Compton, was an interesting appointment. He did a superb job, for which one must commend him, because he laid down the guidelines at the creation of the office. That was an admirable appointment, because his last job as a civil servant had been that of Comptroller and Auditor General, so he had ended his life as a civil servant. He is full of life still, I am glad to say, and is especially concerned with musical matters. He is a man of great distinction, and he laid down the ground rules for the ombudsman and laid a firm foundation. He ended his Civil Service career as a quasi-civil servant, and the importance of that will be seen by the House in a moment.
Then came Sir Alan Marre, Sir Idwal Pugh, Sir Cecil Clothier and Mr. Barrowclough. It is interesting that Cecil Clothier, who now does such an important job with the Police Complaints Authority, was the first ombudsman not to have been a civil servant. The Government over-reacted at an earlier stage to the recommendation of the Select Committee that the ombudsman should not always be a former civil servant, on the basis that justice must not only be done, but must be seen to be done. While it is true that former civil servants are probably more harsh on those who fall below the high standards they set than an outsider would be, nevertheless it does not seem appropriate for the ombudsman always to be a former civil servant. The Government agreed and said that the next ombudsman would not be a civil servant, and this was an over-reaction, because if there had been someone like Sir Edmund Compton it might have been appropriate for him to be appointed. But since then we have had those who have not been civil servants and have given very distinguished service as parliamentary commissioners—Sir Idwal Pugh, followed by Sir Cecil Clothier and now Mr. Anthony Barrowclough, who upholds well the high traditions of the office.
I wish to commend the provisions of the Bill because they result, as far as I am able to see, directly from the Committee's fourth report and the Government's response to it. I commend my right hon. Friend the Minister of State for having taken note of those recommendations, given effect to them in good measure and, indeed, put some additional bodies within the purview of the parliamentary commissioner. As far as I am able to ascertain with the help of the distinguished Clerk, with whom I went through it with some care, there are now included the Charities Commission, the Commission for the New Towns, the new town development corporations and the urban development corporations. It seems to me that it is good that they should be included, but some non-departmental public bodies which the Select Committee suggested be included have not been so included. Why some of our recommendations have not been accepted could appropriately be dealt with from the Front Bench.
I am particularly glad that one matter is cleared up by the Bill, namely, that of the ability of the commissioner to send the reports of the Health Service Commissioner to Members of Parliament who have been involved in the cases brought before him. It is quite clear that in dealing with Government Departments there is the parliamentary filter, because the reports have to come through a Member of Parliament. So it is clear beyond peradventure that the Member of Parliament sees the reports.
With regard to the Health Service Commissioner, the conduit is different. It was not clear whether the Health Service Commissioner would have been entitled to absolute privilege had he sent the reports to Members of Parliament. I thought it might have been appropriate for the Health Service Commissioner to take the risk because he would undoubtedly have been entitled to qualified privilege and it would have been difficult for any litigant to prove malice, which would have been necessary to displace unqualified privilege. But this lacuna is now filled and, in accordance with the recommendations of the Committee, this has now been included within the ambit of the Parliamentary Commissioner for Administration. I hope very much that this will go through without difficulty, and I am pretty confident that it will.
I hope that the Minister, in winding up, will give his prognostication as to what additional staff may be necessary for the commissioner and whether it will be recommended that, again, some of the staff should not always be former civil servants. There have been occasions on which there have been secondments not from the Civil Service to the Parliamentary Commissioner and the Health Service Commissioner and it may well be appropriate for that to be extended. There is no doubt that those who are seconded from the Civil Service to serve in the ombudsman's office are especially keen to ensure that the highest standards are maintained by their fellows. There is none more jealous of the efficiency of the Civil Service than a civil servant. None the less, it may be appropriate that there should be a greater number seconded from outside the Civil Service on the basis that justice must not only be done, but be seen to be done.
I commend this important measure to the House and I congratulate the Government on bringing it forward. I am glad that they have responded to the Select Committee's requests and that in some instances they have gone slightly further than its recommendations.

8 pm

Mr. Alex Carlile: In an interesting diversion a few minutes ago the hon. Member for Rugby and Kenilworth (Mr. Pawsey) offered us the opportunity to extend the debate beyond the immediate scope of the Bill. The House will be relieved to hear that I do not propose to take advantage of that offered extension; save to say that if we examine the effectiveness of ombudsmen in countries where there is the single transferable vote system of proportional representation, it is clear that they are functioning well. Having said that, I shall address myself to the body of the Bill.
I have the privilege of being the most recent recruit to the Select Committee on the Parliamentary Commissioner for Administration, of which the hon. and learned Member for Colchester (Sir A. Buck) is a distinguished chairman. I have the advantage of the fresh interest of being a member of the Committee; and the great advantage of being refreshed, and surprisingly so, by

realising how effective the Parliamentary Commissioner for Administration and the Health Service Commissioner is, as is the Select Committee. As one health authority chairman discovered fairly recently, anyone who falls foul of the criticism of the Commissioner and decides not to accept his recommendations or views does so at his peril. He is dealt with toughly and even roughly by the Select Committee, and rightly so. The fact that the Select Committee is so robust adds power to the undoubted effectiveness and efficacy of the commissioner.
I do not agree with the comments of the hon. Member for Holborn and St. Pancras (Mr. Dobson), whom perhaps I should call the hon Member for Gray's Inn, my own inn, and Lincoln's Inn, that the secondment of civil servants is worthy of criticism. My experience in legal practice is that the gamekeepers who become poachers are the most effective poachers, and vice versa. I have found over the years that former superintendents of police who decide in their retirement to become solicitors' clerks are the most assiduous of instructing solicitors on behalf of the defence. Indeed, they often turn up many possible lines of defence that others would not have imagined possible. The use of seconded civil servants, but not exclusively, as staff for the commissioner is an advantage.

Mr. Dobson: Will the hon. and learned Gentleman accept that his simile is not quite accurate? Ex-chief superintendents do not intend usually to return to the police force.

Mr. Carlile: I do not believe that there is a jot of evidence to suggest that any of the seconded civil servants are anything other than entirely objective in what they do. I reject any criticism on that score. Having taken the trouble to read the Select Committee's reports and the commissioners' reports for some years before I became a member of the Select Committee, I know that there is no evidence to justify the hon. Gentleman's criticism.
I welcome the Bill because it extends the scope of the commissioner, and I congratulate the Government on introducing it. I would be happier if the commissioner were able to institute inquiries and investigations of his own accord, and it is interesting to note that the previous commissioner, Sir Cecil Clothier—Sir Cecil is now the chairman of the Police Complaints Authority, and its first chairman— has the power in his new capacity to institute investigations without anyone asking him to do so. There is no evidence so far that that power has put him, the police or the public at any disadvantage. It is a longstop power that should be made available to someone of great distinction who is exercising an important role, such as that of the commissioner.
There are some oddities in the schedule and I draw them to the Minister's attention in the hope that at some stage it can be reconsidered. There are certain illogicalities: An example which affects my constituency is that whereas the Development Board for Rural Wales is included among the organisations about which complaints can be made to the commissioner, the Welsh Development Agency is not. It may have escaped the attention of the draftsman of the Bill that in my area the development board carries out almost all the functions of the WDA. In a sense, my constituents will be at an advantage compared with those who live in areas that are not under the aegis of the development board and who merely come under that of the WDA. It seems that there is no logic in that distinction.
I am disappointed that the Civil Aviation Authority is not included in the schedule. There are many occasions when members of the public have reason to complain to Members about matters which fall within the authority's jurisdiction. I have in mind especially problems caused by aircraft noise and the timetabling of flights into civil airports. In my constituency of Montgomery there is not an international airport as yet, though I am reliably informed that a small airport is shortly to be built in Caersws. That being so, I may be faced with such complaints in due course. I know that many hon. Members receive complaints about matters which concern the CAA and it is disappointing that they cannot be brought to the commissioner's attention.
It is a matter of great disappointment to me that the Monopolies and Mergers Commission will not be open to the commissioner's scrutiny. The Select Committee recommended that the commission should be subject to it. In its response to the Select Committee the Government considered that the commissioner's
 jurisdiction … should be extended to certain executive non-departmental public bodies".
These would satisfy two criteria. One of the two inclusive criteria was that the body concerned should have
executive or administrative functions which directly affect individual citizens or groups of citizens (including companies) and which would be within the PCA's jurisdiction if carried out by a government department".
The second criterion is that there should be
some degree of ultimate Ministerial accountability to Parliament".
In recent weeks and months great controversy has been raging in the House about matters concerning the Monopolies and Mergers Commission. It is of course fair to point out that controversy concerned ministerial decisions rather than the activities of the Commission. However, one can envisage many different circumstances in which the conclusions of that Commission and, more important, the way in which those conclusions are reached may be questioned. There are few remedies available. It is extremely difficult to obtain a judicial review of the way in which the Commission has reached its conclusions. I hope that early consideration will take place as to whether the Parliamentary Commissioners may scrutinise the Monopolies and Mergers Commission.
I do not want to sound grudging in relation to this Bill, which is highly commendable. I am glad to be a member of the Select Committee that will have a wider range of interesting subjects to consider and face a greater challenge in terms of dealing with recalcitrant persons from a broader public body.

Mr. Ian Gow: Twenty years ago, when you, Mr. Deputy Speaker, were in the House and I was not, the Parliamentary Commissioner Bill received Royal Assent. I must confess that if I had been in the House at that time I would have voted against the Bill. However, 10 years ago I had the good fortune to serve as a member of a Select Committee under the chairmanship of my hon. and learned Friend the Member for Colchester, North (Sir A. Buck). It was during that time, as a member of that Committee, that I began to understand the worth and value of the Parliamentary Commissioner Act 1967.
I entirely agreed with my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) when he stressed the importance of the relationship between a constituent and his Member of Parliament. Of most notable importance is the fact that the constituent may say, "That is my Member of Parliament; that is the person who will champion me." I do not want to be led astray, but I wanted to say to my hon. Friend that I entirely agreed with his recommendation.
However diligent a Member of Parliament may be in championing the interests of a constituent, the ombudsman— whether the Parliamentary or Health Service ombudsman—is able to bring added resources to bear when championing the case of a constituent who has suffered injustice as a result of maladministration. Therefore, I am very pleased that the Government have decided to extend the scope of the Parliamentary and Health Service Commissioner.
I congratulate my right hon. Friend on the way in which he introduced the Bill. I hope that it will have a speedy passage because I believe that it will give additional protection and safeguards to constituents who have suffered injustice as a result of maladministration. I also pay tribute to the work done by my hon. and learned Friend the Member for Colchester, North and his Committee.
The hon. and learned Member for Montgomery (Mr. Carlile)— whose serried ranks are beside him— mentioned that there were some omissions from the schedule. Before I suggest one or two deletions, I would ask my right hon. Friend to consider a further omission which should be remedied. Will he consider adding to the list the Boundary Commission?
Some hon. Members, including Members of the Labour party. believe that their constituents have suffered an injustice at the hands of the boundary commissioners. Though the boundary commissioners are distinguished, in many cases they are driven by an passion for drawing lines on a map and are ignorant about the true nature of the communities that the constituencies are designed to serve. A passion for equality and for lines on a map has disfigured and discredited much of the work of the boundary commissioners.

Mr. Dobson: I appreciate the concept about injustice. Would such injustice be remedied by a change in boundaries or the dismissal of the Member of Parliament who had been elected on the basis of those boundaries?

Mr. Gow: I believe that when the boundary commissioners make recommendations the Parliamentary Commissioner for Administration should conduct an inquiry—mercifully a speedy one—to discover whether the recommendations of the Boundary Commission are reasonable.

Mr. Soames: rose—

Mr. Gow: I will gladly give way to my hon. Friend the Member for Crawley—not Horsham and Crawley but Crawley alone.

Mr. Soames: My hon. Friend will remember the long-running saga of Bewbush when, last year, the Boundary Commission changed my division of Crawley. There was a good deal of local discussion on whether the change rendered by the Boundary Commission was fair to me. The change was fair for the people who came into my


division but was unfair to me because of the nature of the people who live in the Bewbush ward—they are more likely to be associates of the Labour party. My hon. Friend should speculate on whether it would have been possible for me to make a complaint through the commissioner in respect of the boundary changes? In fact, that avenue was effectively blocked off. If I were a deer forest owner, I could complain to the Red Deer Commission.

Mr. Gow: My hon. Friend is correct. The Red Deer Commission is included in the Bill. It would be possible for my hon. Friend, as a citizen, to complain to the Parliamentary Commissioner if he thought that he had suffered an injustice as a result of the maladministration of the Red Deer Commission. Any citizen, including a Member of Parliament, can complain through his Member of Parliament—he could complain to himself—to the Parliamentary Commissioner of Administration if he has suffered an injustice. A Member of Parliament is not excluded from making an application to the Parliamentary Commissioner, through his own Member of Parliament, if he believes he has suffered an injustice.
I believe that if the people of this country have suffered injustices as a result of the decision of the boundary commissioners because they have to make long journeys to see their Member of Parliament, that is because of the passion for equality and parity that seems to be one of the characteristics of the boundary commissioners. This is one suggestion for a extra body in the public sector that could be included in the Bill. I hope that my right hon. and learned Friend will address himself to that.
In the Chamber is my hon. Friend the Member for Gedling (Sir P. Holland). He is a good illustration of what the Boundary Commission has done. His constituency had a distinguished name— Carlton— but it has been changed to a gelding—

Mr. Allan Rogers: Gedling.

Mr. Gow: I deliberately substituted the "1" for the "d". That illustrates why the Boundary Commission should be brought within the scope of the Bill.
Has my right hon. Friend included too many bodies in the Bill? You. Mr. Deputy Speaker, are better than I am at mathematics. I tried to add up the number of bodies in schedule 2 and I am sure that the hon. and learned Member for Montgomery will correct me if I am wrong—and I counted 105. My hon. Friend the Member for Gedling has been most assiduous in attacking quangos and I am sure that he shares my hope that before the Bill completes its passage in another place the Government, inspired by my hon. Friend, will have disposed of some of the bodies.
I want to leave one thought in my right hon. Friend's mind—

Sir Philip Holland: While I applaud my hon. Friend's plea for the abolition of more quangos, I nevertheless strongly approve of tighter control being exercised.

Mr. Gow: My hon. Friend and I are in total accord.
I want to leave one thought in my right hon. Friend's mind. What heroic purpose is served by the Co-operative Development Agency? My right hon. Friend may say that it is a sterling body applauded by the Opposition. Is the Crafts Council essential to the progress of mankind? Does the Crofters Commission render signal service to the

human story—[HON. MEMBERS: "No."] I have received my answer from Opposition Members. What useful purpose is served by the Central Bureau for Educational Visits and Exchanges? Could we not privatise that body? Opposition Members are nodding in agreement. Do the folk come from Venezuela, Ecuador or San Salvador—Latin American countries well known to my hon. Friend the Member for Watford (Mr. Garel-Jones)? Does the British Film Institute have to be in the public sector? I argue in favour of privatisation, a cause dear to the heart of my hon. Friend—not the Member for gelding, but for Gedling.
What useful purpose is served by the Economic and Social Research Council? I put that question especially to my hon. and learned Friend the Member for Colchester, North who is Chairman of the Select Committee. Does that body have to be in the public sector? My hon. Friend the Minister with responsibility for sport is not in his place, but page 9 of the Bill lists the Sports Council, the Scottish Sports Council and the Sports Council for Wales. What happens to the poor people in Northern Ireland? Why do they not have a sports council?
I commend my right hon. Friend the Minister to make a diligent study of those bodies. It is not that I want them to be excluded from the range of inquiry by the Parliamentary Commissioner for Administration, but I wonder whether some of them might be privatised and some of them abolished before the Bill reaches the statute book.
I repeat my warm welcome for the Bill, I repeat my conversion to the cause of the Parliamentary Commissioner, I repeat my tribute to my hon. and learned Friend the Member for Colchester, North, and I hope that the Bill, subject to the changes that I have suggested, will soon reach the statute book.

Mr. Frank Haynes: I shall be brief because of the time factor and the number of hon. Members who wish to speak. It is a great pleasure to serve on the Select Committee. It is a worthwhile Committee, which I believe to be the best Select Committee because of its membership and its work in overseeing the whole of the administration of Departments.
I wish to associate myself with the remarks about previous commissioners. I was lucky enough to be apponted to the Select Committee when I first came to the House, when Sir Cecil Clothier was doing a marvellous job on behalf of the people whom we represent. When Sir Cecil left, I welcomed the appointment of Mr. Barrowclough, who also did a first-class job.
We must not overlook the service to the Committee of its Clerks. We must cover the whole spectrum because we had good Clerks in the past and we have a first-class Clerk now. The Clerk does a really good job and gets stuck into the work so that hon. Members have the information that they require.
I listened carefully to the hon. Member for Eastbourne (Mr. Gow) when he recommended that the Minister should look at the long list of bodies with a view to excluding some of them. However, the hon. Gentleman also suggested that the Boundary Commission should be included. I know that Conservative Members want to include other bodies. I discovered that from the hon. member for Rugby— I think it is Rugby— after the Select Committee meeting yesterday—

Mr. Pawsey: rose—

Mr. Haynes: I am not encouraging the hon. Gentleman to intervene.

Mr. Pawsey: I do not really need any encouragement. My constituency is Rugby and Kenilworth— a point that I had intended to make to my hon. Friend the Member for Eastbourne (Mr. Gow). If I am fortunate enough to catch your eye, Mr. Deputy Speaker, I shall elaborate on that later.

Mr. Haynes: I am obliged to the hon. Gentleman for that information. I am worried about the extension of the activities of the Parliamentary and Health Service Commissioners. That has worried me ever since I became a member of the Select Committee because although it is easy to pile work on to a Department, if the manpower to deal with it is not available the whole process will slow down. Indeed, that has been a complaint in the past.
I am keeping my remarks brief because the Bill will now go into Committee. I am sure that I am the first to be able to say that I will serve on that Committee. That is almost a certainty. I look foward to the Committee's debate on the Bill.
The present and previous Parliamentary Commissioners have not been afraid to speak their minds, and neither have hon. Members been afraid to do so. When it is necessary, it must be done—whether or not that upsets people. Even if it involves high-ranking professionals, it does not make any difference. I remember when the Select Committee summoned the chairman of the Board of Inland Revenue to appear before it. He had a rough ride. He did not like coming before the Committee, and he will not like doing so again. However, the job had to be done, and the Parliamentary Commissioner and hon. Members made sure that it was done.
I look forward to the Committee stage and am sure that we shall have a first-class debate. I hope that when the Bill reaches the statute book it will be satisfactory, not only to hon. Members, but to the people whom we represent.
I agree that we should discuss the Department and reports on it more often in the House. That would give us the opportunity to speak about the people who serve us as Members. It is right and proper that the House should know about the first-class service that we received in that Committee.

Mr. Warren Hawksley: I do not intend to delay the House, but I should like to welcome the Bill and especially the extension to the list of the bodies that the parliamentary ombudsman can investigate. I begin by admitting a slight reservation about the effectiveness of commissioners or ombudsmen, whether local, parliamentary or health ombudsmen. The famous man on the Clapham omnibus may expect to find that he has a case of maladministration against a public body, but often when the commissioners investigate it they do not necessarily seem to follow the logical conclusion, as it would appear to that average person. In some cases, where partial success is achieved by the Commissioners the public body involved does not necessarily respond with quite the enthusiasm that our constituents would wish.
Before and since the Government's White Paper, Cmnd. 9563, which was published in July 1985, I have argued strongly for the inclusion of the new town

corporations and especially for the one in my constituency of Telford, in the list of public bodies that the ombudsman can investigate. I was slightly worried by the reply to a written question that I put down on 4 December 1985, column 268. The Under-Secretary of State for the Environment said that legislation would be introduced, in due course, to bring the new town corporations under the control of the parliamentary ombudsman. Therefore, I congratulate the Government and my right hon. Friend for bringing forward this legislation and for making sure that the phrase "in due course", which put fear in my mind, means the next parliamentary Session.
There is a strong need for new towns to have an appeal body to which constituents can go if they consider that there has been maladministration by the corporation. I hope that schedule 2, which talks about a
Commission for the New Towns,
means the commission for each individual new town. I believe that it does. I gathered from previous answers that Ministers have given me that that was their intention.
In a constituency such as mine, if maladministration is committed by the Wrekin district council, the constituent has the right of appeal to the local government ombudsman. However, if the Telford development corporation, commits that maladministration, my constituents have no such rights. I hope that I shall receive assurances that they will have that right once the Bill is on the statute book.
I am not especially critical of the Telford development corporation. I do not believe that it is any worse, or any better, than the district council. However, it is important that we should clarify the rights that constituents have when they take appeals further than the corporation itself.
I should like to ask the Minister two questions, to which I know that my constituents would like to know the answers. First, if the Bill receives a speedy passage through both Houses—we all hope that it will—when does the Minister expect that it will be effective? Will it cover any maladministration that could be going on now but about which my constituents may not he aware, but which could become apparent to them later, although the date of the maladministration could be before the passing of the Bill?
My second question concerns page 10 of the Bill and the issues raised in the notes. Note 7 states:
In the case of the Commission for the New Towns, a development corporation for a new town, or the Development Board for Rural Wales, no investigation shall be conducted under this Act in respect of any action in connection with functions in relation to housing.
Why has housing been excluded? It would have been desirable to include it despite the fact that one appreciates that new town housing will go to other bodies in due course. That may not happen for one or two years, but if that is the reason, I should hope that consideration could be given to the inclusion of housing as one of the areas that the ombudsman might consider. I should like to reiterate my full support for the Bill and my belief that it is a move in the right direction. I hope, and believe, that it will receive not only all-party support but a speedy progress through both Houses.

Mr. Michael McNair-Wilson: I did not have the opportunity to serve on the Select Committee, and to that extent I am at a disadvantage compared to other hon. Members who are in the Chamber.
Perhaps my right hon. Friend the Minister will forgive me if I begin by asking him why the Health Service Commissioners for Scotland, England and Wales are referred to in the Bill, but no reference is made to Northern Ireland? Is that because, under the heading "Northern Ireland Office" which appears in a schedule, the Northern Ireland Health Service is subsumed into that title, or will a separate body cover Northern Ireland? If so, will the changes in the Bill be incorporated into that Bill and will it soon be brought before the House so that Northern Ireland can be put on the same terms as the rest of the United Kingdom?
I should like to concentrate my remarks purely on the Health Service Commissioner. I do so although I am aware that the Health Service Commissioner and the Parliamentary Commissioner for Administration are, in fact, one and the same person.
Secondly, clause 2 enables the Crown to part with the services of the Parliamentary Commissioner and the Health Service Commissioner for medical reasons, presumably on the grounds of physical or mental incapacity. How will that action be taken? Who will decide whether the Parliamentary Commissioner is no longer mentally or physically able to do his job? In other words, who appoints him and withdraws from him his right to do that job? What appeals procedure will exist for him? It would be a rather curious situation if the ombudsman required an ombudsman of his own to protect his rights. As I can find nothing in the Bill to cover that point, I should like to know whether he could appeal if he disagreed with the judgment about his physical or mental condition. The clause refers to the monarch making that decision. However, I cannot help feeling that it is unlikely that Her Majesty would make that decision, and I should be pleased to know whose responsibility that will be.
I welcome the contents of clause 3. It seems absolutely right that a Member of Parliament who has taken a complaint on behalf of a constituent to the Health Service Commissioner should be informed of the commissioner's findings, as is the case with the Parliamentary Commissioner. That seems a long overdue reform.
The question on this clause to which I should like to direct my remarks relates to the role of the Health Service Commissioner. What exactly is he doing, what can he do, and is he fulfilling an especially useful role? To that extent I want to follow the remarks of the hon. Member for Holborn and St. Pancras (Mr. Dobson), with whose comments I am broadly in agreement.
In the Health Service Commissioner's annual report about his activities there are certain figures that are surprising, if not worrying, bearing in mind that in 1984–85 there were no fewer than 9,000 written complaints relating to the Health Service. Assuming that in 1985–86 there were the same number of complaints, of those 9,000 written complaints only 926, or 10 per cent., were directed to the Health Service Commissioner. Of those 926 complaints, 454 were rejected, 273 were referred back or closed and the Health Service Commissioner issued reports on only 137. That is a minute number of complaints for such a powerful body to have investigated, dare one say it, at a high cost to taxpayers. Of those 137 reports, 50 per cent. related to grievances about nursing.
We talk about maladministration being the touchstone on which we decide whether or not the ombudsman has a role, but I wonder whether grievances about nursing can fairly be described as maladministration. Moreover—I

must ask the House to forgive me if I refer to myself—as a result of the Hospital Complaints Procedure Act 1985, my private Member's Bill, I wonder whether those complaints will go to the ombudsman.
I introduced the Bill because no discernible stress was laid on complaints procedures such as may have existed in hospitals where I was a patient for over eight months. But now, as a result of that Act, every hospital has a statutory duty to produce a complaints procedure and to make it known by leaflet to every patient. In those terms it seems that the 50 per cent. of cases relating to grievances about nursing which the ombudsman considered are not in future likely to go his way. As my hon. Friend the Member for Derbyshire, South (Mrs. Currie) said when she was in charge of Lords' amendments to my Bill:
Over time, as the health authorities obey the instructions set out in clause 1 and introduce a complaints procedure and tell people about it, the ombudsman may be unable to take up cases because the Secretary of State and the health authorities have pre-empted him."—[Official Report, 5 July 1985; Vol. 82, c. 641.]
In other words the ombudsman may soon find that he does not have a genuine role as a Health Service Commissioner. If that is the case—I hope that the Government will consider this matter with care—is it not reasonable to suggest that perhaps a new role should be found for the Health Service Commissioner which might make his work more valuable than it appears it will be in the future?
From those figures it appears that the ombudsman has been involved in only 10 per cent. of the complaints that arose in the Health Service in a particular year, and that of those complaints or issued reports he looked at only 1 per cent. Therefore, the idea that he stands as some bastion for the patients or those who suffer from maladministration in the Health Service is far-fetched, to say the least. Yet there is a genuine need for a complaints procedure over and above the Hospital Complaints Procedure Act. At present that job is being done by Action for Victims of Medical Accidents, which looks at thousands of complaints that are brought to its notice by ordinary people who have found themselves unable to get an explanation from their local hospital or regional health authority about the circumstances in which either they or members of their family have found themselves disadvantaged in hospital.
It does not seem reasonable that a private body should consider such a large number of complaints when the Health Service Commissioner looks at such a tiny number. There is a mismatch somewhere. Either the work of the Health Service Commissioner is not properly understood, or his remit is drawn so narrowly that he cannot effectively provide a service which makes the NHS more sensitive to the problems of patients.
Why are hospitals and regional health authorities so unwilling to come forward with evidence? It is because they fear that by doing so they may make themselves liable to prosecution. Therefore, as a patient put it effectively to me, they create a wall of silence around the incident that is being investigated. When a patient leaves hospital, he will find the greatest difficulty in breaking through that wall to discover the reality, although the reality may in itself be trivial and one which most of us would have said could be explained without difficulty. Every hon. Member present will have had constituents coming with problems, asking for an explanation and sometimes an apology, but


finding the hospital or authority refusing to go beyond much more than an acknowledgement, for fear of giving grounds for liability.
I must stress the point because as medicine becomes defensive medicine, as it is in the United States of America, we shall see a greater unwillingness by the medical profession to come forward openly and say what happened, for fear of litigation. There is a role for the Health Service Commissioner. I may be told that I am talking about clinical judgment, but I am not. Action for Victims of Medical Accidents states that 60 per cent. of the cases with which it deals are not seeking financial compensation. They are seeking an explanation and occasionally an apology but not money. If it can fulfil that role, where litigation and the desire for financial compensation are not involved, why on earth cannot the Health Service Commissioner follow that course and take up that burden? The organisation is a privately funded body which lacks funds, but it does a most worthwhile job. The Health Service Commissioner earns a large salary and is replete with a full staff, yet at present he is handling what can only be described as a piffling number of complaints. I strongly urge my right hon. Friend the Minister to consider in particular the role of the Health Service Commissioner, with a view to making his task more effective and worthwhile.
I cannot end without saying that in the end we must move away from the concept of litigation for negligence in hospital cases. We should consider a no-faults compensation scheme. But I know that that is a different argument and outside the remit of the Bill.
In giving the Bill a welcome, I do not believe that we have recognised adequately that the Health Service Commissioner's job may become decreasingly important unless we give it some new definition which could make it a much more valuable instrument than it is at present.

Mr. J. F. Pawsey: I say to my hon. Friend the hon. Member for Newbury (Mr. McNair-Wilson) that I have listened, as have other Members of the Select Committee, to what he has had to say. I am sure that members of the Select Committee will consider the points that he raised.
To my hon. Friend the Member for Eastbourne (Mr. Gow) I say that the boundary commissioners do not always get it wrong. In Warwickshire they certainly got it right when they discovered an affinity which was not too obvious at the time to everyone living in the county and they decided to conjoin Rugby with Kenilworth. The gentrification that has taken place since then has been entirely to my advantage.
The hon. Member for Ashfield (Mr. Haynes) is a distinguished and robust member of the Select Committee, and I believe that he was entirely right to draw attention to the manpower implications of the Bill. I hope to deal with that. He believes that he will serve on the Standing Committee. I certainly hope that he will, and I look forward to joining him.
I welcome the Bill. I congratulate the Government and my right hon. Friend the Minister on its introduction. I believe that it is particularly helpful and that it will do

much to strengthen and improve the powers of the Parliamentary Commissioner. It is an indication of his worth that this measure has now been introduced.
It might be helpful to look briefly at the office of Parliamentary Commissioner for Administration. It was first set up in 1967 on the Scandinavian model to investigate maladministration in government. That was closely followed by the Health Service Commission, which was established in 1973 to investigate maladministration in the National Health Service. I thought that the hon. Member for Holborn and St. Pancras (Mr. Dobson) was being a trifle defeatist and not his usual cheerful self when he referred to the slowness with which the Health Service Commissioner sometimes dealt with cases. I have to say to him—he need not take my word for it, but that of his hon. Friend the Member for Ashfield who is sitting beside him—that the Health Service Commissioner's job is not easy. It is his job thoroughly to investigate complaints, and that takes time. That is probably why the cases are not always dealt with as expeditiously as he would like. It is also fair to say—again this can be confirmed by the hon. Member for Ashfield—that a substantial amount of the work of the Select Committee is represented by the work load of the commissioner who deals with the NHS.
In 1974 there was the creation of the third part of the Trinity, the Commissioner for Local Administration. I believe that the Bill is a further step towards providing citizens with much greater rights of redress against Government agencies. It is worth drawing the House's attention to the fact that there must be very few Select Committees which have had a report accepted almost in its entirety, as has happened in this case. That underlines, perhaps as nothing else can, the fact that the Parliamentary Commissioner discharges a most worthy function. As my hon. and learned Friend the Member for Colchester, North (Sir A. Buck), the Chairman of the Select Committee, said, it is a success story. He was right to use that phrase. Those of us who serve on the Select Committee believe that it is doing a most worthwhile job.
The report and the Bill argue that the non-departmental public bodies— quangos— should be brought within the jurisdiction of the Parliamentary Commissioner. I entirely agree. I believe that there is a powerful case for giving Parliament, through the commissioner and the Select Committee, the option of receiving and redressing complaints about the activity of powerful bodies, which range from the Advisory, Conciliation and Arbitration Service to Oftel and from the Medical Research Council to the tourist boards.
Many of the bodies listed in schedule 1 spend literally millions of pounds of taxpayers' money and their activities impinge on the lives of most, if not all, members of the public. Therefore, it is right that they should be subject to a complaints procedure. I believe, as other hon. Members clearly do, that no organisation can be all right, all the time. Therefore, complaints must be made from time to time. Where such a case exists, it will be examined in detail by the Parliamentary Commissioner.
As my hon. and learned Friend the Member for Colchester, North said, nothing in the Bill prevents a Member of Parliament, if he so wishes, from actively pursuing a constituent's case directly with the body concerned. The Parliamentary Commissioner is an alternative route that can be followed and it does much to allow constituent's cases to be examined. It is important


—this was touched on by the hon. Member for Ashfield— that the Parliamentary Commissioner has additional staff that will reflect the additional work load generated by the Bill. I am convinced that the House does not wish to see the office of the Parliamentary Commissioner brought into disrepute by inadequate staffing levels or by the long delays caused by too few people investigating too many cases. That was mentioned by the hon. Member for Holborn and St. Pancras.
The fourth report of the Select Committee is interesting. On page VII, paragraph 9 it states:
while there may be procedures for appeal against formal decisions, these are not necessarily an adequate substitute for the investigation of administrative actions … Further, 'public bodies which exercise functions neither on behalf of the Crown nor on behalf of local authorities have been deliberately set up at arm's length from either.'
In an arm's-length operation, the public need specific protection and I believe that the PCA provides that.
Paragraph 10 of the report states:
There should be no possibility of shelter behind technical 'non-departmental' status.
It is because the quangos— non-departmental public bodies as they are referred to on the face of the Bill— are not directly answerable to Parliament, that I believe the PCA is necessary.
Paragraph 14 of the report excludes nationalised industries. I have some reservations about that exclusion. I am certainly not satisfied that the consumer bodies set up to safeguard the interests of the public have the necessary sharp teeth to enable them to discharge their work in an entirely reasonable way. One has only to look at the difficulties that exist in trying to persuade British Rail to give details of the punctuality of trains to make a case in point. I am delighted that the hon. Member for Birmingham, Perry Barr (Mr. Rooker) who has just taken his seat on the Opposition Front Bench, evidently agrees with me on that.
I now come to the point made by the hon. Member for Ashfield. It seems that there is a case for the British Broadcasting Corporation to be included in the scope of the Bill. Clause 1(6) does not automatically exclude the corporation. I would very much appreciate the thoughts of my right hon. Friend the Minister when he winds up, for I would have thought that it would be helpful if the BBC was brought within the terms of the Bill.
As I said at the outset, I welcome the Bill, but would like to see some additional measures, particularly as they apply to local authorities. Members of the Select Committee will know that from time to time local authorities have been before the Committee, and I found it unhelpful that in certain cases those local authorities had totally disregarded the findings of the commissioner. Even when the commissioner made further representations to those local authorities, such representations were still, and deliberately, ignored. I believe that the commissioner dealing with local authorities should possess more teeth than at present. I make that point to my right hon. Friend the Minister so that he may take it on board, if not for this Bill then for a future Bill. When local authorities ignore the ombudsman, they bring the office of the ombudsman into disrepute. That disrepute must spill over on to this House, because we are responsible for setting up the ombudsman. If we fail to ensure that he has adequate powers to ensure that his findings are met, we are not discharging our responsibilities properly.
The ombudsman is a success within the closely defined limits which surround him. That point was made by my hon. Friend the Member for Newbury. I have considerable sympathy with the case that my hon. Friend argued and I hope that my right hon. Friend the Minister will consider that. We have hedged the ombudsman too closely, and perhaps we should be seeking to extend his general responsibilities. So often we find that matters are raised which one would have thought should be examined, yet the ombudsman states they are outside his specific terms of reference.
Many cases are referred to the ombudsman, but not all are accepted. that is a classic variation of the theme "many are called, but few are chosen." That results in considerable dissatisfaction. The House could usefully consider two suggestions. First, the area in which the commissioner operates should be better and more effectively publicised. Secondly, greater publicity should be given to his existence, particularly in light of his new responsibilities. That point was referred to earlier.
The Parliamentary Commissioner undertakes a most useful function. However, too often it is found that people are unaware of his existence or, if they are aware of his existence, they do not understand the specific area in which he operates. Therefore, it is important that a greater effort is made to publicise the office of the Commissioner. The public should be aware that there is a watchdog and that that watchdog is now operating on a slightly longer chain.
I welcome clause 3, as other hon. Members have done tonight. It will allow copies of reports to be seen by the initiating Members. It is an entirely logical step for an hon. Member to see the end of the chapter that he has brought forward.
I commend the Bill and hope that it will speedily be enacted and put on to the statute book to provide more protection for our constituents.

Mr. Nicholas Brown: We all have our illusions shattered at some time and, having learnt during the course of the debate that the hon. Member for Crawley (Mr. Soames) does not own a deer forest, life seems somehow diminished.
My hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) quoted Milton. Milton also wrote that it is
better to reign in hell, than serve in heav'n.
In responding to the debate for the Opposition, I want to say at once that the Bill's main purpose, as the Minister perfectly properly explained, is to extend the jurisdiction of the Parliamentary Commissioner for Administration to non-departmental public bodies or quangos. I am sure that that is worthwhile, but no doubt in Committee we will want to consider in more detail which bodies are to be included and which are not. Indeed, the Committee may want to debate what constitutes a non-departmental public body. In the Bill, the Government have adopted a criterion different from that of the Select Committee, as a number of hon. Members quite properly observed today.
As I understand the Government's view, and the Minister may wish to respond to this point in his summation, they do not wish to extend the jurisdiction of the Parliamentary Commissioner for Administration to non-departmental public bodies which operate in a commercial or contractual manner. Why should bodies


which operate in that way not be scrutinised by the ombudsman? The distinction is hard to maintain in practice and has no moral foundation in any possible theory. Is the Government's objection that there could not possibly be any wrongdoing in the commercial area, or is it that the tests of standards of behaviour which the ombudsman applies are somehow unsuited to the commercial world?
There may be a fear in some quarters that if the principle was allowed for the public sector's commercial activities, sooner or later something similar will be applied to the private sector. Certainly, the retiring Parliamentary Commissioner, Sir Cecil Clothier to whom tribute has been paid in the debate, saw no reason why bodies that operate in a commercial or contractual manner should not be included in the ombudsman's area of responsibility. He said as much in his final annual report.
I believe that the Government's distinctions are also difficult in practice. The hon. Member for Ashfield (Mr. Haynes) and the hon. and learned Member for Montgomery (Mr. Carlile) referred to that. The Government have departed from the Select Committee's recommendations by excluding the British Museum from the ombudsman's area of responsibility. However, they have included the British Library as an extra. They have excluded the Scottish and Welsh Development Agencies, but have specifically and additionally included the Co-operative Development Agency.
What process of decision making lies behind the change to exempt the Monopolies and Mergers Commission, whose inclusion was recommended by the Select Committee, but has led to the inclusion of the Commission for Racial Equality and the Equal Opportunities Commission, whose inclusion was not suggested by the Select Committee? Does this not have more to do with political prejudice than any judgment of the issues of public administration?
The hon. and learned Member for Colchester, North (Sir A. Buck) referred to the worrying issue of resources, and I support him in what he said. There is no point in an ombudsman if his office is so overworked that delays become another focus of public discontent to add to the grievance that took a complainant to the ombudsman's door in the first place. Although the resourcing of a parliamentary commissioner does not require further legislation, this is an important matter to which Mr. Barrowclough drew attention in his report for 1985–86. Parliament must be committed to resourcing the extra duties it places on the ombudsman. There is no point in doing anything less.
Clause 2, which deals with medical incapacity of the commissioner, is not the subject of any controversy. However, on the Health Service Commissioner, the Bill is significant more for what it leaves out than for what it includes. Clause 5, which changes the time period for health authorities to raise matters with the ombudsman from three months to 12 months is not objectionable in itself but it is not a sweeping reform either. Nor is clause 3, which will enable Members of Parliament to get copies of reports on cases that they take up without the risk of the ombudsman being sued for defamation. I thought that the ombudsman might have taken a chance on that, as the hon. and learned Member for Colchester, North properly pointed out.
The hon. and learned Gentleman also referred to clinical complaints. It is interesting that Sir Cecil Clothier had something to say about this in his final report, in which he reflected on his own experience and that of the office on its 10th anniversary. One of the topics he covered was clinical complaints. He declined to answer the question whether he should take such complaints, arguing that this was a matter of political discussion and discussion with the professionals. However, he discussed whether he could do so and concluded that it was practicable, although expert assessors would he needed. That is important, and we could return to it in Committee.
The family practitioner committee complaints have been properly touched on. The Health Service Commissioner discussed these matters in his annual report of 1983–84, in paragraph 10. Referring to the statutory regulations governing the formal family practitioner complaints procedure, he said:
Those regulations are complicated and the ordinary citizen frequently finds them hard to understand.
The report goes on to say that the time limit, the formality of the procedure, its complexity and its adversarial structure all combine to make the complainant feel disadvantaged. The commissioner tells us that complainants look to him for redress, but in vain, because the actions of contractors to the family practitioner committees are outside his power.
As with complaints about clinical judgment, there can surely be little doubt, certainly among ourselves, that there is a public desire for an easily understood, non-adversarial mechanism for dealing with the issues. I accept that there is controversy as to what the mechanism should be, but there can be no doubt about that public desire. The Health Service Commissioner could provide such a mechanism, and I am sorry that the Government have not seen fit to include this in the Bill.
Both the Select Committee and the Health Service Commissioner have urged that personnel and contractual matters be included in the scope of the commissioner's responsibilities. This would not require legislation as it could be done by Order in Council, but the Government seem to have no intention of doing anything of the sort, although I accept that they would not have to do that in the Bill. Nor does the commissioner look like getting the power to investigate matters concerning the Health Service on his own initiative when there has been no complaint. Although the Select Committee did not back him on that point, I can see the strength of it and perhaps we will be able to explore it further in Committee. The contents of the Bill are not so onerous or so wrong as to cause us to press the matter to a vote.

Mr. Luce: I have enjoyed listening to the debate, not least because it seems that in all parts of the House there is strong support for the purposes of the Bill. I was glad to hear the speeches by the hon. Members for Holborn and St. Pancras (Mr. Dobson), for Newcastle upon Tyne, East (Mr. Brown) and for Ashfield (Mr. Haynes) and by the hon. and learned Member for Montgomery (Mr. Carlile). They all gave broad support to the Bill and raised a variety of points which can probably be more easily explored in Committee.
We also heard from my hon. and learned Friend the Member for Colchester, North (Sir A. Buck) who played


such a prominent part in chairing the Select Committee. He and the other members of the Select Committee do an excellent job.
My hon. Friend the Member for Eastbourne (Mr. Gow) made a characteristically colourful speech in which he asked me to justify the fact that the Red Deer Commission is incorporated. I shall find that slightly easier to answer in Committee after I have had a little more time to think about it. I noticed a great tremor of excitement and tension when my hon. Friend spoke about the Boundary Commission and asked why it was not incorporated. I know his feelings and to some extent I share them because of the shape of my constituency. The Boundary Commission is an advisory body and, in the context of the Bill, we are talking only about bodies with executive and administrative functions.
The striking feature of the debate is the great belief in the value of the ombudsman. We have had 20 years' experience of an ombudsman and, although the hon. Member for Holborn and St. Pancras expressed doubts about the staffing, there was a unanimous view that Mr. Barrowclough and his staff do an excellent job. I shall deal in a moment with the questions posed about resources.
The most useful way in which I can respond to those hon. Members who asked why certain bodies were included while others were excluded is to remind the House of the broad criteria for selecting quango-type bodies for incorporation in the schedule to the Bill. As I said in my opening speech, such bodies would have to meet certain criteria. They should be subject to some degree of ultimate ministerial accountability to Parliament because they are dependent for finance and continuing existence on Government policy.
Clause I of the Bill sets out in detail how we interpret those criteria as a broad basis upon which to try to make a judgment. In addition, we must take into account the cardinal fact that they apply only to bodies with executive or administrative functions which directly affect individual citizens or groups of citizens. The complaints must also be based on evidence of sustained injustice as a consequence of maladministration. On the basis of those broad criteria, I have to make a judgment about which quango-type bodies should be included. Hon. Members would not wish me to detain the House by answering the questions posed about specific bodies, but we can make some judgments in that context.
Consider, for example, the Civil Aviation Authority, about which some of my hon. Friends raised questions. In carrying out most, if not all, of its functions, the CAA acts as a tribunal, subject to oversight by the Council on Tribunals. The Government fully endorse the Select Committee's view that tribunals should not be brought within the scrutiny of the PCA. I respect the fact that these matters can be examined in more detail in Committee, but I wish only to give some idea of the matter.
A question was raised about the Monopolies and Mergers Commission, which is principally an advisory body with no executive function. Again, it does not come within the criteria that I have set out.
My hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) referred to the BBC. I accept that there are grey areas, but, largely, the BBC does not qualify within the broad category of executive and administrative functions, with the exception of misrepresentation and invasion of privacy. There is already an effective supervisory body, the Broadcasting

Complaints Commission. Again, this matter can be probed in more detail in Committee. I select those bodies simply to illustrate the broad criteria that the Government have determined for the selection of this range of bodies.
There has been much discussion about quangos. I am pleased that my hon. Friend the Member for Gedling (Sir P. Holland) is present. He played a most effective and prominent role—I do not know whether it is fair to say this or whether I shall come under some criticism for saying it— in hunting quangos. I have overall responsibility for the Government's policy on quangos. There has been a net reduction of just over 500 in the number of quangos in the past seven years. Much of the credit for that goes to my hon. Friend. The purpose of the debate is not to determine exactly how many quangos there should or should not be but to take into account what quangos there are and to consider whether they should qualify for inclusion in the Bill.
Some of my hon. Friends asked about the resources available to the ombudsman to undertake his task. It is clear that the ombudsman must have resources to meet his new responsibilities. There is no shadow of doubt about that fact. At this stage, it is difficult for the ombudsman to be sure about what increasing work load he will have, but he is making a careful assessment. There has been a review of the ombudsman's staffing needs. Careful account will be taken of the implications of the Bill when it is passed. I assure my hon. Friends that this matter is being taken fully into account.
My hon. Friend the Member for Newbury (Mr. McNair-Wilson) made an impressive speech, principally on the subject of the Health Service Commissioner and about whether his powers and tasks are sufficiently wide ranging. His speech was based, in a moving fashion, on his own experience—let alone that of his constituents—of the Health Service. It is my job to take into account what he said, although I hope that he will bear with me in accepting that the main purpose of the Bill is to seek to extend the jurisdiction of the PCA to include quangos. Therefore, some of the other points that my hon. Friend raised about the Health Service Commissioner should be considered seriously for the longer term.
I am grateful to my hon. Friends the Members for The Wrekin (Mr. Hawksley) and for Rugby and Kenilworth for their contributions to the debate. As I am unable to answer their questions in detail at this stage, 1 shall try to answer them by letter or in Committee.
My hon. Friend the Member for Newbury asked who had the power to appoint the ombudsman. My right hon. Friend the Prime Minister advises on the appointment of the ombudsman. He also asked why Northern Ireland has not featured in the debate. Northern Ireland had its own PCA, established under the Parliamentary Commissioner Act (Northern Ireland) 1969, who investigates complaints of maladministration by Northern Ireland Government Departments or authorities.
The Bill will become effective about two months after it has completed all its stages and, in answer to my hon. Friend the Member for The Wrekin, it will be able to deal with complaints that are being made now by members of the public. I am delighted that it has received such a warm welcome. I look forward to examining the Bill in more detail in Committee. I warmly commend it to the House.
Question put and agreed to.
Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

PARLIAMENTARY AND HEALTH SERVICE COMMISSIONERS BILL

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act resulting from the Parliamentary and Health Service Commissioners Bill, it is expedient to authorize—

(a) the payment out of the Consolidated Fund of any salary, pension or other benefit payable by virtue of the provisions of that Act to an acting Parliamentary Commissioner for Administration or an acting Health Service Commissioner for England, Wales or Scotland; and
(b) the payment out of money provided by Parliament of any increase attributable to the provisions of that Act in the sums payable out of such money under any other Act.—[Mr. Neubert.]

Orders of the Day — Rent (Relief from Phasing)

The Minister for Housing, Urban Affairs and Construction (Mr. John Patten): I beg to move,
That the draft Rent (Relief from Phasing) Order 1987, which was laid before this House on 13th January, be approved.

Mr. Deputy Speaker (Mr. Ernest Armstrong): I understand that it will be convenient to discuss at the same time the second motion on the Order Paper:
That the draft Protected Shorthold Tenancies (Rent Registration) Order 1987, which was laid before this house on 13th January, be approved.

Mr. Patten: I am most grateful because, Mr. Deputy Speaker, at 3 o'clock this morning I was talking about the beauties of Basildon's shopping centre. With questions this afternoon, I feel that I have already spoken enough for one day. I should not like to have to go through two separate debates on these orders. Therefore, I am grateful to the hon. Members for Birmingham, Perry Barr (Mr. Rooker) and for Leeds, West (Mr. Meadowcroft) for having agreed to this course. [Interruption.] And, indeed, I am grateful to every other hon. Member, including my hon. Friend the Member for South Ribble (Mr. Atkins).
The draft orders before us represent minor but essential and long overdue changes to Rent Act legislation. They will restore some of the incentives for private landlords to let properties which have been left empty because of the restrictions of the Rent Acts. They will particularly encourage landlords to make accommodation available in London where housing need is at its greatest. This will benefit many people—job movers, single people and the homeless for whom private renting is sometimes the logical and, indeed, the only choice.
I shall deal first with the Rent (Relief from Phasing) Order which abolishes the phasing of rent increases for regulated tenancies. The hon. Member for Perry Barr does not need to be reminded that it was the Labour party's Rent Act of 1965 that introduced the current fair rent machinery. That Act makes no provision for the phasing of rent increases. Under the 1965 Act landlords were allowed to charge the full fair rent immediately.
The phasing of increases in regulated rents has been with us since the days of counter-inflation measures. In particular, the Conservative Government in 1973 froze rent increases. That was subsequently converted into statutory phasing, in the Housing Rents and Subsidies Act 1975. Phasing was introduced at a time of high inflation to protect tenants from paying large increases all at once. I understand why it was thought necessary at the time to do that. The 1975 Act provided for an increase in the fair rent to be payable in three equal instalments.
In 1980, the present Government altered the phasing provisions and the effective period of registrations. We reduced from three years to two the period before a fair rent could be reviewed, and made a similar change to the phasing period. The effect of this is that only half of any increase in rent can be charged immediately, the full rent becoming, due one year later.
Under phasing, I do not think that it is unfair to say that the landlord never gets a fair rent. He or she does not get the fair rent assessed in 1985 until 1986, when it has already fallen behind. When, in 1987, a new fair rent is


fixed, appropriate for 1987 circumstances under legislation, he or she does not get that rent until 1988. Unfair rent would be a better description, certainly less fair than it was in 1965 when the Labour Government introduced the Rent Act legislation which introduced fair rents.
For many years private landlords and housing supply in Britain have lost out because rent increases have fallen behind the rate of inflation. Since 1970— these are important facts—private rents have lost a fifth of their value against the retail price index, and two fifths against average earnings or against local authority rents, which are not phased.

Mr. Nick Raynsford: Will the Minister give way?

Mr. Patten: I do not think that I will.

Mr. Raynsford: Why not?

Mr. Patten: Because I do not choose to.
Inevitably, there has been a catching up process, and this is still continuing, but the annual rate of increase has fallen from 12·5 per cent. in 1983 to 8·5 per cent. in 1986.

Mr. Raynsford: rose—

Mr. Patten: If the hon. Member for Fulham was here at 3 am talking about Basildon he would be slightly tetchy. If the hon. Gentleman is fortunate enough to catch your eye, Mr. Deputy Speaker, he can make his own speech in his own way.
Inflation is now firmly under control and is at its lowest for many years. The abolition of phasing will make a marginal difference to rents payable, but it will help landlords to obtain a better yield from rentals, and in turn help them to carry out often much-needed repairs to their properties. We suffer from a disrepair problem in Britain. Ending phasing will not affect the ability of tenants to claim housing benefit on any higher rents, which is very important.
The second order with which we are concerned is the Protected Shorthold Tenancies (Rent Registration) Order which deals with shorthold tenancies in Greater London.
Shorthold tenancies were introduced by the Government in the Housing Act 1980 as an initiative to encourage private landlords to let property. That has been useful outside London; it has been a lamentable failure in Greater London. The key element of shorthold is that it is a fixed-term tenancy of between one and five years, at the end of which the landlord may, if he wishes, take possession of his property. That allows a landlord to enter into short-term lettings with the knowledge that he is guaranteed possession at the end of the period. If the tenant refuses to go at the end of the fixed term, the landlord has an absolute right to repossess his property. The tenant enters into the agreement quite freely, knowing that it is for a fixed term, and that the landlord has the right to reclaim the house or flat at the end of the tenancy provided he serves notice as the rules of the tenancy require.
In devising shorthold, my right hon. Friend the then Secretary of State for the Environment, built in safeguards to protect the interests of tenants. The most important of these involves serving the correct notice to the tenant. Before a shorthold is granted, notice must be served to the tenant in a form prescribed by Parliament telling the tenant exactly what his rights are clearly and precisely, so that there can be no misapprehensions. There are also

strict rules, which I strongly support, that the landlord must follow in bringing a shorthold to an end. If they are not followed, a fully protected tenancy is created.
Initially, it was a precondition of a shorthold tenancy that a fair rent had to be registered for that tenancy. This condition does not apply, and never has applied, for any other private letting. It was a unique precondition. The statutory provisions governing shorthold gave the Secretary of State power to review the position and modify the conditions, and he did so in 1981. It was clear that the requirement for uneconomic fair rents to be registered was enough to deter many landlords from using shortholds, so this requirement was waived for shorthold tenancies outside Greater London.
There has been modest growth in the number of shorthold tenancies. They have encouraged job mobility and have been a valuable addition to the housing armoury. People elsewhere in the Western world would think that we are wasting our time debating whether shorthold tenancies are good or bad.

Mr. Raynsford: How many shorthold tenancies are there?

Mr. Patten: There are a limited number. If I have the opportunity later, I shall give the exact number. In many other countries in western Europe people would not waste their breath talking about whether shorthold tenancies are desirable. It is simply a form of contract which is entered into all the time. It is a great help to housing in other countries.
The order lifts compulsory rent registration for shorthold tenancies in London to bring them into line with shorthold tenancies elsewhere. The order does not affect the position of existing shorthold tenants in London. Their existing fair rents will continue to have effect. I emphasise that it is still open to either the landlord or the tenants, or both, of a shorthold tenancy outside London to apply for a fair rent to be registered. It is important for the House to realise that that opportunity still exists.
The reasons for our proposals are simple. There is growing evidence that, although shorthold is used successfully by many landlords outside London, it is not used much inside the capital. The order is designed to encourage its use in the capital, where there is a substantial housing need.
Since 1980, the Opposition have been hostile towards shorthold. I have heard of the pledges given by the hon. Member for Birmingham, Perry Barr (Mr. Rooker) and his hon. Friends to repeal this form of tenure should they form a Government at some future date. They are concerned that the shorthold tenant has insufficient security of tenure. But the tenant does have security for the duration of his or her agreement and he or she can extend the letting with the landlord's approval. Such tenants have, and will still have under our proposals, the right to have a fair rent registered for the property. That right is not removed.
There are great merits in the shorthold system and I hope that they will lead to an increase in this useful form of tenure in the capital. It has brought a bit of much-needed rented accommodation on to the market, by giving a fair deal to tenants and a degree of confidence to landlords.

Mr. David Winnick: How much?

Mr. Patten: It is difficult to estimate how many shortholds there are in the country, but I shall endeavour, if I am given leave to speak again, to give the exact number. I am afraid that I do not have the figures in front of me, so I cannot answer the question.
Landlords have been able to bring into use properties which fear of the Rent Act had forced them to keep empty because they were concerned that they could never recover possession. The order will build on this success and bring benefits to both landlords and tenants. We want this process to continue.
I hope that I have made clear in my brief remarks the purpose of and justification for these two orders. They will help those in housing need. I commend the orders to the House.

Mr. Jeff Rooker: The Minister, who has admitted that he is somewhat tired, has attempted to make a quarter reasonable case for what might look like two quite innocuous orders, on the grounds of low inflation and bringing more properties into rent, but the Opposition do not take the matter so lightly. Indeed, if it were not for the Opposition these two orders would have disappeared upstairs to a Committee to be dealt with one morning, scrutinised under our procedures, but not dealt with on the Floor of the House of Commons. I think that we were right to insist on this debate on the Floor of the House.
We did that for a reason. We want to send a signal to the Government and, indeed, to private landlords. It is a simple signal. It is that, however innocuous these orders may appear to be, we are not prepared to accept the decontrol of rents and we object to this thin end of the wedge approach. We want the Rent Acts strengthened, not weakened, which is the effect of these orders. I know that Ministers might argue that it is only at the margin, but it is the thin end of the wedge, and we want to send this signal to those outside this House who may or may not make their decisions based on the fact that there will at some time in the future be another Government.
People outside do believe that we have not taken on the role of a one-party state. In this area of activity, housing policy and the private rented market, people outside know that their investment decisions depend on consensus. I tell them now that there is no consensus on rent decontrol, and if they have not taken that message on board before tonight, it has to be reaffirmed here and now.

Mr. Winnick: I am most grateful to my hon. Friend for giving way, particularly in view of the arrogance of the Minister in refusing to give way at all. Is my hon. Friend aware that on a number of occasions the Minister has referred to rent controls as Socialist controls, and does that not indicate only too clearly that, in the unlikely event of this Government being re-elected, security of tenure for new tenancies will be removed?

Mr. Rooker: My hon. Friend is perfectly right, but I hope that we can keep the debate more good natured and good tempered even than Question Time was today.
We know from the constant requests from Conservative Members to their Ministers that the majority of them want the lid to be taken off rents. This is constantly brought out at Question Time and in the occasional debates that we have on the matter. Ministers

have now started to respond to that request, and it is clear that however much Ministers may prevaricate, they too want the lid taken off rents. They have made certain commitments about what might happen with new tenancies if they were to form another Government, but my hon. Friends know the score. The ultimate purpose will be to take the lid off all rents if they form another Administration. On what the Government decontrol, we shall reimpose controls which are suitable to the particular occasion.

Mr. Michael Latham: Does the hon. Gentleman realise that in section 12 of the Rent Act 1965, which was piloted through the House by Richard Crossman—this section as it now is having been introduced by him on Report—there is power, by ministerial order, to take any houses out of the regulated sector? That was introduced by Richard Crossman himself.

Mr. Rooker: One of the reasons why we object so much to this piecemeal approach is that we object to the detail here but we also object to the principle of the thin end of the wedge. There probably would not be any argument between us if the Government had a housing policy. If the Government were setting out to see that housing need was met, whether to rent or to buy, in the public sector and the private sector, and that there were sufficient houses for people to rent where they wanted to live, there would not be the artificial shortage of homes to rent—indeed, the artificial shortage in some parts of the country of homes to buy—thus forcing up prices of both homes to buy and homes to rent. No one is advocating—I am sure that the hon. Gentleman is not advocating—that that particular power in the Act be used in present circumstances, given the nature of the housing crisis.
The Opposition see no long-term future for traditional private renting for commercial profit as a form of housing tenure. For the avoidance of doubt, I reaffirm our support for shared ownership and assured tenancies, which I declared on 19 February at columns 377–78. I reaffirm also that being another person's landlord for a crude commercial profit is an unacceptable way of earning a living.

Mr. John Butterfill: Why?

Mr. Rooker: I understand through the usual channels that we shall have much more time available to us next week to develop our case than we have now. I shall be happy next week to take on board the hon. Gentleman's question.
As I have said, it is our belief that to be another person's landlord for a crude commercial profit is an unacceptable way of earning a living. I exclude from that statement the institutional part of the voluntary sector. We want to see private tenants opting for the voluntary sector that is represented by housing associations and co-operatives, or local authorities. We believe that tenants of private absentee landlords should have the right to buy their homes.

Mr. Butterfill: On that point—

Mr. Rooker: When the hon. Gentleman last intervened in one of my speeches on the issue of private tenants—this was at column 377 on 19 February 1986—he uttered a four-letter word. I hope that he will not do that again.

Mr. Butterfill: The hon. Gentleman may have to apologise to me about that, because he may remember that Hansard was corrected. I used the word "scrapped", not the four-letter word that appeared in Hansard. I remember thinking at the time that it was understandable that Hansard should have made the error.
I should like to know whether, in the private sector, the hon. Gentleman would include the provision of accommodation by building societies, insurance companies and pension funds. Is he opposed to their providing private sector rented accommodation, or does he regard them as more acceptable landlords?

Mr. Rooker: The organisations to which the hon. Gentleman has referred may fund rented accommodation, but they do not necessarily provide it themselves. Most of them will act through housing associations that are registered with the Housing Corporation, or set up registered associations and use the assured tenancy scheme, which means that the landlord must be approved by the House. Shorthold landlords have not been brought before the House for approval, and it would be a different kettle of fish if the Government were to do so.
Without saying yes to the hon. Member for Bournemouth, West (Mr. Butterfill), I want to exclude the organisations to which he has referred. In some respects they are institutional, and they may use means other than the crude private landlordism—the old fashioned style—that we came to "love" so much. Many thousands of tenants came to love and hate it so much as they were winkled out of their homes in London years ago. As I said last year, that is still happening. My hon. Friend the Member for Fulham (Mr. Raynsford) knows that as well as anyone in the House.
In the first half of 1986, regulated rents increased by between 8 and 9 per cent. That information was based on one set of figures that was used to produce the answer to a question on 19 November 1986, at column 248. According to the collective view of 10 different organisations, rents increased by no less than 17 per cent. Either way, the increase is above the average wage increase. That is especially so when we consider that the concentration of tenants in the private sector comes mainly within low-income groups, who are not receiving anything like average wage increases. The Minister's argument about there being a low inflation rate does not justify an increased frequency of rent increases.
A sample carried out in 1983–84 showed that a quarter of private tenants had incomes of less than £2,600 a year. The Minister may say that such tenants can get help through housing benefit, but at the same time one of his colleagues is spending most of his time excluding people from housing benefit and reducing their eligibility to claim such benefit. The Minister's actions tonight will mean that rents will go up higher and faster, and at the same time the DHSS is reducing the number of those who are eligible for housing benefit. Approximately 1·9 million households in the private sector are eligible for housing benefit, but how many of those people will be eligible next year? The Minister should know those figures before he comes to the House with these orders, the consequences of which will be significant for thousands of families.
If we take a random borough—the London borough of Greenwich—[HON. MEMBERS: "Random?"]—I have no vested interest in Greenwich. I do not live there, I do not represent it and it is better to quote a different example

from that of my city of Birmingham. In Greenwich, some 9,000 families in the private rented sector are in receipt of housing benefit. Many of those families may lose their eligibility to housing benefit once the Government's proposed changes take effect. They will lose that benefit at the same time as rents go up faster and higher as a result of tonight's orders. The Minister should consider the effects on those families before he brings orders such as this to the House.
Some of the families will be driven from their homes and as usual, the local authority will be forced to pick up the tab. The Minister has said that landlords get a low return, and I admit that that return is low at 1 or 2 per cent. net, but some of the worst housing in this country, in terms of quality and condition, can be found in the private rented sector. In many large cities and in my constituency, some of the worst housing is owned by private landlords. Nothing in these orders will improve the quality of those private rented homes. Perhaps that is the Governments intention. We might look at these orders in a different light if the consequent higher rents resulted in repairs being carried out to those homes. However, I suspect that landlords will continue in much the same way and will not carry out repairs to the homes of their tenants.
I believe that the second order on shortholds provides a positive incentive to raise rents so as to force tenants out and thus enable landlords to sell the property. That is the name of the game. The rent increases that landlords would consider equal or adequate in comparison to owner-occupied values may be as high as 200 or 300 per cent. in some areas.
I accept that tenants may register their rent, but the Minister must be aware of surveys that show that some 50 per cent. of tenants are unaware of the type of tenancy agreement that they have. Being unaware is one thing: being aware and scared stiff is something else. Some tenants are scared of the harassment that they still recieve from landlords in the late 1980s.
Shorthold tenure, especially in London—the Minister must be aware of this because it was mentioned in debates in 1980 when the tenancy was introduced—was supported by his hon. Friends only as long as fair rents were compulsory. After tonight there will no longer be compulsory fair rents in London.
The Minister cannot, in all justice, use the argument of non-registration outside London. He must be aware that things in London with regard to both housing and other aspects of life are different from life in the rest of the country. If the Minister does not know that now, he never will. It is not that London wants to be different; it is simply that London is different, whether in health, transport or any aspect of housing policy. Therefore, there are umpteen different reasons why London deserves to be treated separately.
The Minister might argue that shorthold has worked outside London, but he must be aware that outside London registered rents are much close to market rents. Nobody can claim that to be the case in London, where market rents are ridiculous and often four or five time higher than registered rents. For landlords of shorthold tenancies, the incentive will be to ensure that their tenants do not ask for a fair rent to be registered. That incentive is not as great outside London, and perhaps that is why the position is so different. It would help elucidate the argument if the Minister gave the figures for shorthold both in Greater London and outside it.
I repeat tonight what we have already put on record, namely, that we are committed to abolishing shorthold. There may be a csae—I put it no stronger than that—for retrospectively considering some shorthold tenancies. One or two of my hon. Friends may raise this matter tonight because of their direct constituency experience. It might apply especially where there has been a mushrooming of private landlords using shorthold tenancies outside London, especially in former National Coal Board property. We give notice to the owners of that property that when we are in government we will not hesitate, should the circumstances so warrant, to bring forward retrospective legislation—[Interruption.] Oh, yes, the owners of those properties must take that on board. It is not open season on those properties to exploit the tenants in the way that is happening in some parts of the country.
We may have to consider retrospective legislation. It is strong action, and no Government want to take it. I do not think that this Conservative Government, who have brought in retrospective legislation, wanted to do so. However, they have not shied away from doing it where necessary, and nor did the previous Labour Government. Where there is a case to be made and warnings have been given from the Front Bench, the Government of the day are fully entitled to say that such action is warranted. Therefore, I warn those who are operating shorthold in that manner of the consequences.
We are not interested in taking the lid off rents in the private sector, and therefore we shall oppose both orders in the Lobby tonight.

Sir Geoffrey Finsberg: "I'll huff and I'll puff and I'll blow your house down"—that is the value that the public should place on the last few sentences uttered by the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who has made open threats. Similar open threats were made during the passage of the Housing Act 1980, but they had little or no effect. I trust that they will have the same effect on this occasion.
I wish to confine my remarks to two issues, the first being phasing. I am distressed because during the past few days there has been an enormous stirring up with a compaign of falsehoods perpetrated by a number of local authorities and organisations. That is one reason why the debate is on the Floor of the House—although there is but a baker's dozen on the Opposition Benches. There might have been as many had the matter been dealt with in Committee. The debate has attracted no one to the Press Gallery and only a baker's dozen on the Opposition Benches—

Mr. Raynsford: Where are the Tories?

Sir Geoffrey Finsberg: As the hon. Gentleman knows, when Governments introduce such measures they are not expected to have vast hordes of Members in the House. The Opposition called for the debate, but they are notable by their absence.

Mr. Winnick: Will the hon. Gentleman bear in mind that only two weeks ago a move by one of his hon. Friends to deregulate the privately rented sector was defeated? Apart from the fact that the payroll vote abstained for

obvious political reasons, surely that shows the interest of Labour Members in defeating that attempt to deregulate the private sector in a Tory-dominated House of Commons.

Sir Geoffrey Finsberg: The hon. Gentleman never learns. He is mixing up ten-minute Bills, which he knows are of little importance, with something that is actually going to happen. Private Members' Bills are, quite rightly, different from ten-minute Bills. As someone who got a ten-minute Bill through the House many years ago, I know what luck was involved and that it does not have any real political significance.
Having illustrated the genuine interest of Opposition Members—they are not here—I am disturbed to hear the hon. Member for Perry Barr say that there is no consensus on the building of properties. He must realise that one result of that would be a continued reduction in the number of rented properties available. If, as the hon. Member says, most landlords are getting a net return of between 1 and 2 per cent., they will feel that, if one of their properties became vacant, they would be better served by selling that property. That would remove the property from the rented sector, and I do not believe that that is the right thing to do.
If we are now to have the two-year phasing period, when the rent officer is working out the fair rent he will not have to take into account the fact that, as my hon. Friend the Minister rightly says, the full fair rent will not come into effect until halfway through that period. Therefore, the effect will not be greater increases, which is what the hon. Gentleman implied. I do not believe that that will happen.
The policy of the Labour party has contributed to the unfortunate shortfall in private rented property in London. Can my hon. friend the Minister tell me why the phasing requirements, in relation to registered rents for housing association tenancies, are not altered? I am not suggesting that they should be altered, but I am asking why there is that differentiation. That was put to me by a deputation which visited me yesterday, and which wanted to know—they were not friends of mine—why only the private tenants would have the phasing requirement removed. They wondered why co-ops and the like would not have it removed. I should be grateful if my hon. Friend would answer that.
Those of us who have lived in London all our lives, as has the hon. Member for Norwood (Mr. Fraser), will remember that among the best private landlords were companies such as Legal and General, the Prudential, the old London County Freehold and Leasehold Properties, which built hordes of low-rented properties throughout London before the war. The only reason why they went out of business was the continued restriction on rents, which meant that they could not repair the properties properly out of the income that they received. That is why those good landlords went out of business.
I genuinely did not follow the argument of the hon. Member for Perry Barr. Does he mean that if that sort of company wishes to go back into the market it should not do so because it would be getting profits from what the hon. Gentleman would call people's homes? I should be grateful if he would elucidate that point.

Mr. Rooker: What I said before the intervention was probably clearer than what I said after it. Institutional


bodies will probably use a different system from the previous one. They will invest in assured tenancies or in rented housing through legitimate housing associations. Generally speaking, it could be argued that that is not done for crude commercial profit, as the Freshwaters and the Rachmans of this world did in the past.

Sir Geoffrey Finsberg: As the hon. Gentleman will know from my speeches in this House, I held no brief for Freshwaters or one or two others which I could and may name when we debate the Bill, following the Nugee report in this House. I am grateful to the hon. Gentleman for that because the point is important and that may be a source of supply.
I am the only survivor here tonight of the ministerial team who put shorthold tenancies on the statute book. My hon. Friend the Minister is absolutely right to remove the compulsory element from London. I do not agree with the hon. Member for Perry Barr that masses of people in shorthold tenancies do not know their rights. The information given to them is in such a detailed form that they would find it impossible not to know what their rights were. Perhaps my hon. Friend will tell me whether the forms that must be provided when these orders become law will state that, although there is no compulsion for registration, it is open to the landlord or tenant to apply, if they wish. That would seem to be logical.
I am worried that shorthold tenancies have not got off the ground as we hoped they would. We believed that shorthold tenancies would provide extra rented property which could make its contribution under controlled terms towards housing people who might have wanted to work and live in London and who required a property for only one or two years. Under shorthold, landlords were prepared to accept that because they knew that at the end of the term there would be no problem of the tenant wishing to remain for ever and, indeed, the tenant's successors.
I acknowledge that shorthold has not been the success that we hoped. Again, that is because of the attitude of the Opposition, who made it clear that they were wholly against the concept. However, despite that, some people have entered into shorthold tenancies. When it is clear to the public that there is not the slightest possibility of a Labour Government for at least the next decade shorthold will begin to take off properly, especially in view of my hon. Friend's action to remove the compulsory element of registration in London.
I welcome these two orders. They will do absolutely no harm to those who require accommodation in the private sector. Indeed, they will help to preserve or restore some element of balance between the two sides in housing, and it is important that we remember continually that balance is part of our society.

Mr. Michael Meadowcroft: I agree with the hon. Member for Hampstead and Highgate (Sir G. Finsberg) that this is a question of balance. It is necessary to emphasise that there is a problem with rented accommodation which must be tackled. It will do no good to enforce a particular ideology for its own sake, considering the problems that people face day by day. Therefore, it is important to consider whether the Government's attempt to shift the balance from its present position will be beneficial to those in greatest need. That must be the test of the orders.
There has always been a problem with rented accommodation and it could always be affected by controlling legislation. The difficulty is that unless all housing markets are controlled, both the buying and rented markets, it is difficult to control one without upsetting the whole picture. Yet it has never been possible to decontrol the whole area, because we do not have a variety or a sufficiency of housing for those who want it to be able to pick what is suitable for them. The consequence is that we are left picking bits and pieces of it to control but always finding that unsatisfactory. I do not believe that it is possible to find a perfect way through that jungle. It will always be a question of compromise at any given time.
I accept, as the hon. Member for Birmingham, Perry Barr (Mr. Rooker) said, that there is a psychological prejudice against landlordism. It is a prejudice that I instinctively share, but it is not something on which one can base legislation, not least because we really need every rented accommodation unit that we can get, whatever its ownership. Therefore, perhaps in some idealistic future we may be able to act upon that prejudice, but it is not something that will influence how we decide on the orders today.
The reality is that landlordism is no more nor no less justified than any other way of making a profit out of an essential commodity of life. One has to look at it to see how to provide the best out of a difficult situation. I find the private ownership of land far more instinctively objectionable than landlordism because one cannot create more land as one can create more houses. Nevertheless, one has to determine one's views and policies according to how to provide the most accommodation units for those in need.
In my constituency if one was to look at the old terraced houses, which are popular and beloved of many people, those in the worst condition are owned by the local authority. That is the sad fact. In some cases, but not all, it is because the local authority wishes an area to have a blight on it so that it becomes a candidate for clearance and compulsory purchase. I totally reject that. People are no more fond of a public landlord than a private landlord in those circumstances.
When we have a problem of law trying in this regard, it is a problem of law to regulate the bad landlord, which has a detrimental effect on the good landlord. That is a real difficulty. Many of the good landlords, often those who have no more than half a dozen houses at most and who have treated their tenants fairly, resent the implication of the way in which legislation affects all landlords. Therefore, one has to look at whether the orders are beneficial in those circumstances.
I have had to conduct campaigns, like so many other hon. Members, against landlords who would seek to find a way round particular legislation by pretending that they are offering bed and breakfast accommodation and throwing a rasher of bacon through the door in the morning. It sometimes takes two years to enforce the law against those landlords. One uses all the resources of the press to try to combat that, but the good landlords feel themselves to be under pressure because one is talking about private landlords as a whole.
Another problem, which has been referred to already, is the geographic problem that there is not the same pressure in other parts of the country as there is in London and the south-east. The problems of trying to find


accommodation in London are horrendous. In other cities, includng my own, the problem is not one of quantity but quality. There is a quantity of housing, but much of it is unlettable because people will not take it in any circumstances. That is a different problem and it will not be helped by the orders. They will not create better quality housing in other areas even if they attempt to affect the quantity in London and the south-east.
In proposing that the orders be approved, the Minister has to show that the situation in London is better than it was when the previous regulations were introduced. He has not shown that. He cannot come to us and say, "The evidence is that a variation in this way will improve the housing situation in the capital." Even on new properties, the rent differential between London and other parts of the country is 2:1. Given that, I do not see how one can argue that it is the right moment to start easing the regulations regarding shorthold tenancies or of phasing as it affects London.
There is the question of how one draws a balance between competing interests. It is interesting to draw an analogy between what happened at Question Time regarding planning regulations and the type of houses being built as residential accommodation. We heard that the free marketeers on the Conservative Benches wanted regulations to allow different kinds of houses to be built than those currently being forced through under planning regulations. They recognise quite rightly in their constituencies such as Bournemouth or Eastbourne, that the kind of houses that were needed were not those that were being built. If people in the housing market are providing houses for profit rather than housing for need, there must be even more pressure on rented accommodation. The orders tonight will not improve that position.
If the housing position is improved, there is an argument for shifting the balance more towards the landlord. However, I do not believe that the housing position has improved. I believe that it is worse. Why should the balance be tipped towards the landlord when the housing position is worse than it was?
The Minister made a great point about inflation being lower. Therefore, the argument for phasing becomes less sustainable. The problem from the Minister's point of view is that inflation in rented prices does not necessarily conform to general inflation. The suggestion is that in 1986 the inflation rate for private rented accommodation was about 17 per cent., not the Government's 4·5 per cent. figure. There again, the argument for phasing to be abolished is hardly a help when a tenant finds that his private rent does not subscribe to the general theories about inflation.
I believe that it is wrong to introduce this greater benefit to landlords at the moment. It is all very well for Conservative Members to refer to the right to rent. We should also consider the ability to rent. That question is apparent to many people who are struggling to rent at the moment. It is also strange that the Minister had to admit in his publications that shorthold has not been properly

monitored. He said that there are problems in knowing how many shorthold tenancies exist. if they have not been monitored and we do not know the conditions and problems that such tenancies create, it is unfair of the Minister to come to the House today and claim that creating more of these tenancies will help by reducing the powers of control on such tenancies. I believe that that is an argument against approving these orders.
A special area of concern exists among elderly people who are living at the margin where they do not receive housing benefit. They are fearful that, because their income is phased, it does not conform to the rules of rented accommodation and they will suffer greater hardship by the abolition of phasing than many other people. The danger of removing the controls on shorthold may well increase the number of shortfold tenancies, but not in the way that the Minister would like. People may see a loophole to increase incomes from such tenancies. Therefore, as and when they can, they will create shorthold tenancies out of long tenancies to shift the market and the prices in their favour. By increasing scarcity in that way, we will not improve the position for people who have to rent.
The Minister emphasised—and indeed overemphasised—that the regulations will not affect existing tenancies. We are not over much concerned about existing tenancies. We are concerned about how the position will change in future. I do not believe that the orders will improve the position. The people in these tenancies are often most vulnerable. I am fearful that we will establish an itinerant population moving from shorthold to shorthold who are afraid to claim and enforce their rights. They are not confident enough to enforce their rights.

Mr. Butterfill: Does not the hon. Gentleman realise that it would still be open to a tenant to register a fair rent? It is only the obligation to do that which is removed.

Mr. Meadowcroft: The hon. Gentleman is correct. However, I fear that the conditions in his constituency are different from those in mine. Although we may explain people's rights to them, they only see the roof over their head which they may lose if they make life difficult for their landlord. They are not normally people who would take that risk.
It is all very well to claim that there are laws against harassment. Of course there are, but it is not easy for a weak tenant to enforce those laws against a powerful person. The regulations will not improve the situation.
The important recent case of Street v. Montford, of which those concerned about housing will be well aware, showed that landlords cannot so easily get away with licences. The court has now held that these create tenancies. In future, London landlords may be wary of inadvertently creating a tenancy and may prefer to go down the shorthold route, particularly if rents do not have to be registered. Such a case shows that this is the wrong time to be shifting the balance towards the landlord. The orders should be opposed because the case for them has not been made.

Mr. John Butterfill: On an evening when the headline in The London Evening Standard reads:
Threat to home buyers: Labour plan tax relief cut on one million mortgages",
it is appropriate that the Government should be promoting legislation that goes some small way to improving and strengthening the private rented sector. I am deeply saddened by what I have heard from the Opposition Benches, because I had hoped that we might be moving somewhat nearer to a consensus on housing in general and on the provision of housing in the private sector in particular. I can see that that is not the case both by what has been said by the hon. Member for Birmingham, Perry Barr (Mr. Rooker) and by the signs that I am receiving from the hon. Member for Fulham (Mr. Raynsford), but that does not particularly surprise me, given his record.
It is profoundly sad that we are debating whether it is appropriate for accommodation to be provided by the private sector, and, if so, how the private sector can assist. I should have thought that Labour Members who complain regularly that there is insufficient investment in housing would look seriously at whether the private sector can assist and at ways in which they can encourage the private sector to take part in the process that we would all like to achieve—housing people well.
It must he wrong for us to expect the private landlord to subsidise rents. If rents are to be subsidised in the long term, they should be subsidised by the public sector and not the private sector. Elsewhere in the world—for example, in Canada and Germany—it is easy to obtain rented accommodation in the private sector. That includes not just institutional investors such as the pension funds, insurance companies, building societies or similar organisations, but individuals.
I know that the hon. Member for Perry Barr feels passionately about this, but not all private landlords are the evil, self-seeking people he believes them to be. I can introduce him to private landlords who invest in the provision of private accommodation for others because they regard it as a Christian duty to do so. They would prefer to invest their money in providing accommodation for other people less fortunate than themselves than to invest it in the stock exchange. I can see nothing reprehensible in that—I find it admirable. I can think of groups of families who invest in that way and continue to relet their properties at rents substantially below the market level because they consider that to be their Christian obligation. For the hon. Gentleman to denigrate the whole of the private sector in that way pays little tribute to the dedication of such investors.

Mr. Winnick: Does the hon. Gentleman accept that the initial phase of British landlordism led to the public sector being responsible for slum clearance and redevelopment? The facts about that are quite well known. The Rent Act 1957 basically did that which the hon. Gentleman is advocating. It discredited landlordism and itself to such an extent that when the hon. Gentleman's party was thrown out of office it could not even bring itself to vote against the incoming Labour Government's legislation and argued instead that that which Richard Crossman was proposing should broadly be accepted.

Mr. Butterfill: I do not agree with the hon. Gentleman's analysis of the problem. The problems with rent controls and the effect of such controls on the private sector go back much further than the hon. Gentleman suggests. The interference with the market that took place in the past gave rise to the shortages that he describes. Those were compounded by the war and the enormous damage that caused to our housing stock. I accept—I think it Es common ground between us—that there were some appalling landlords and none of us would wish to see the return of such people. If we could reach some agreement with the Opposition by which we could encourage a reinvestment of the private sector on a responsible basis, that would be a great advantage. Surely what we are doing here goes some way towards that.

Mr. Meadowcroft: Of course there are good landlords and I know of such people in my part of the world. Does the hon. Gentleman accept that in most places there are owners of properties on which there is little or no outstanding debt? The number of altruistic people who have to pay high debt charges on modern property is nowhere near as great as the number of landlords of older properties who do not have that problem. We will face bigger problems with modern properties than we will face with old properties.

Mr. Butterfill: I accept that that can apply to some extent. I do not advocate the immediate abolition of all rent controls because, like the hon. Member for Perry Barr, I do not wish to give an immediate profit to all the property speculators who have invested in the hope of getting vacant possession or making a huge hike in rents. That would not be appropriate. I should prefer a system under which the rent reflected the price paid by the landlord. I should also like to see a degree of indexation. On that basis we might be able to start to agree. We could do that if we could get over the quite inexplicable prejudices of the Opposition against the private sector as a whole. I passionately would like to see conditions improve. What we are doing tonight goes some way towards achieving that.
The shorthold system is valuable, but its expansion has been greatly limited by the sort of threats we have had from the Opposition. First, they say that they will abolish the system. Secondly, they say that they may consider retrospective legislation. Who can be surprised that the private sector has not rushed forward to invest when threats of that sort are being issued quite clearly by the Opposition Front Bench?
There are other problems with the present shorthold legislation and I should like to give an illustration from my constituency. One of my constituents owns three flats. When he became severely disabled and was unable to work, he used his savings to invest in the provision of accommodation for others. He has deep religious convictions and believed that that was a proper way to invest his money. He has let on a shorthold basis his little block of three flats. Sadly, one of the tenants was not very satisfactory. He was disruptive to the other tenants and generally behaved in a way which was upsetting to his neighbours and to the other tenants in the block. At the end of the year, my constituent sought to terminate the tenancy by giving, he thought, the correct notice under the Act. He employed a firm of solicitors to do that for him. Sadly, there was a defect in the way in which the notice was


served, and a further tenancy was created. Two years have gone by and my constituent still has not been able to obtain possession from his unsatisfactory tenant.
We need to look again at the question of notice. If we are to have a system whereby a landlord is able to get possession—it should be a system that is so simple that he should not need detailed legal advice—it is wrong if a landlord, having taken legal advice twice, is unable to get possession, particularly when the tenant is disruptive towards neighbours. That is an entirely different problem. I should like my hon. Friend to look at that matter and consider it further.
It is anomalous that, with regard to shorthold, one situation should apply in London and another elsewhere, particularly one that is prejudicial to the establishment of further shorthold tenancies.
Therefore, I welcome the action that my hon. Friend is taking.

Mr. Nick Raynsford: We are considering two shabby and vindictive little orders introduced by a shabby and discredited Government who no longer have any pretence of a housing policy. They preside over the worst escalation in a housing crisis that I, and I believe most hon. Members, have seen. It is perhaps ironic that we should hold this debate tonight when, during Question Time, the Minister gave figures showing that, in the International Year of Shelter for the Homeless, under the Government's housing policy, the number of homeless households has passed 100,000 for the first time. What a disgraceful comment on the appalling failure of the Government to have a responsible housing policy.
The reason for the escalation of the housing problem is a critical shortage of rented housing, which is the result of two specific trends. One is the deliberate running down of the public sector rented housing programme, which was the deliberate policy of the Government through drastically cutting their support for councils and housing associations. The figures show only too clearly the extent to which those cuts have reduced rental options in the public sector. In England the number of new homes becoming available through council building programmes reduced from 67,000 in 1979 to just 18,000 in the past 12 months. The number of housing association homes also reduced, despite the Government's pledges to support the housing association movement. The number of new build and rehabilitated dwellings provided by housing associations reduced by approximately 50 per cent. during the lifetime of the Government. That record is their responsibility.
The other reason for the homelessness crisis is the shortage of rented housing in the private sector. There has been a continuing decline during the lifetime of the Government. The Government's policies have failed to stem that decline.
We are now presented with two orders that, we are told, will help to stimulate private renting. The evidence is against the Government. In 1957, the Conservative Government attempted, by reducing rent controls, to stimulate the private market. The evidence shows exactly how wrong that philosophy can be. The Rent Act 1957 did not usher in an increase in the number of lettings but heralded the period during which there was the sharpest

decline in the number of private lettings during the whole of the century as landlords used the opportunity to get rid of their tenants and to sell their properties. On being returned to office in 1979, the present Government introduced in the Housing Act 1980 a measure that they hoped would stimulate private lettings. The then Secretary of State for the Environment, the right hon. Member for Henley (Mr. Heseltine), said:
I believe that we shall improve the opportunity for rented accommodation."-[Official Report, 15 January 1980; Vol. 976, col. 1457.]
We heard various other pledges about how the 1980 Act would improve options for rented housing. In practice, that did not happen. Between 1979 and 1986, 500,000 rented houses went off the market. The number of private rented homes declined from about 2 million to 1·5 million. The Government cannot pretend that that is our fault. They were in power during those years. The Government's 1980 Act was supposed to stem that decline and stimulate the market. They should take the responsibility for their failure.
The 1980 measures failed to stimulate private lettings, as will the two minor measures that we are debating tonight. They will cause further hardship to private tenants who have already suffered very considerably from this Government's actions on a number of fronts: from cuts in housing benefit, from the threat to remove Rent Act protection from new lettings and from the threat to change the rent registration procedures and repossession procedures, as announced in a recent consultation paper issued by the Lord Chancellor's Department. This attack on private tenants throughout the country, but particularly in the London area, will be remembered by them at the next general election.
The Minister pretended that the rents registered for private tenants have failed to keep pace with inflation. He did so by an extraordinary sleight of hand. He quoted figures that were based on 1970. Why should he have used 1970 as the base? Does he not believe that there was a Labour Government between 1974 and 1979? Is he not prepared to be honest and straightforward with the House and take the logical and sensible base? The 1979 figures are quite simple. They are figures for which this Government are responsible.
Since 1979 there has been an 87 per cent. increase in the level of mean registered rents for unfurnished tenancies in England and Wales. In the last two years—to put the Minister's comments into context, since he referred to the reduction in inflation—the increase in the registered rent levels has been 18 per cent., far ahead of the level of inflation. What is the possible justification, therefore, for claiming that rent levels have not kept pace with inflation and should be increased? It is a completely dishonest and specious argument that is justified by bogus statistics from a Government who are desperate to try to cover up their own failings.

Mr. Butterfill: Will the hon. Gentleman give way?

Mr. Raynsford: Yes, Although the Minister would not give way to me when I was about to rise to correct him on those figures, I shall happily give way to the hon. Gentleman.

Mr. Butterfill: I am most grateful to the hon. Gentleman. Will he tell us what the increase in the cost of


living has been since 1979? Is it not true to say that since 1979 the increase in the cost of renting accommodation has been less than the increase in the cost of living?

Mr. Raynsford: I was quoting the figures for the period from 1979 to 1985.

Mr. Butterfill: The hon. Gentleman is being selective again.

Mr. Raynsford: No. That is the latest period for which figures are available from the Department. I took them straight out of the latest published housing and construction statistics.
The Minister has been extraordinarily generous in giving us statistics on shorthold tenancies. I am sure that he would like the House, therefore, to have the most upto-date statistics. I am quoting his Department's figures. He may not like them, nor may Conservative Members, but they are their figures.
The title of the first of these orders is the Rent (Relief from Phasing) Order. It provides relief from phasing for landlords, but it does not provide relief from phasing for tenants. It removes relief from steep rent increases. Many of my constituents are facing very steep rent increases. Rent officers in the London area are fixing rents at figures that are substantially higher than the rate of inflation. There is no justification for the order. It is being moved on a bogus premise and it should be rejected.
The second order is the Protected Shorthold Tenancies (Rent Registration) Order. Here the Government are ratting on commitments that were given by previous Ministers. I say that advisedly. During the debate on the Housing Bill in 1980 the then Minister for Housing was challenged about what would happen, because a power was available to Ministers to vary the provision for rent registration. The then Minister for Housing said:
However, I cannot agree that the shorthold proposals are basically unreasonable or unfair to tenants. Tenants will have to pay no more than a fair rent as provided by other rent legislation … There will be no deregistration to market rents."—[Official Report. 15 January 1980; Vol. 976, c. 1564.]
Tonight we have a simple case of the Government reneging on Minister's pledges.

Sir Geoffrey Finsberg: The quotation that the hon. Gentleman has given destroys the snide case that he has been making. The Minister said that there would be no deregulation to market rents. What this order is doing is getting deregulation to fair rents, but it is still permitting the regulation to be applied if the tenants want it. There is a difference between market rents and fair rents, and the hon. Gentleman knows that.

Mr. Raynsford: The hon. Gentleman knows from his experience of the London housing market that the majority of lettings in London are outside the rent registration procedures. Figures suggest that a small minority of lettings in London are registered. The problem with this safeguard is that it will subject—as has been made clear by Opposition Members—tenants, who are by definition in an insecure position, to pressures from landlords against getting the rent registered. Tenants will be told that if they apply for rent registration they will be out. That is the kind of pressure that is being exerted on tenants in London, and it will intensify as a result of this shabby order.
We know that the pledges given by the Ministers cannot be trusted. What surprises me is that the orders are before

us not for a sound policy reason, not even for a policy reason based upon proper analysis, but on the basis of a vague hope that a few extra shortholds will be conjured into existence in London. What an appalling comment. The Minister has been unable to give us any figures on the number of shorthold tenancies, when he is proposing an order which is designed to increase the number of shorthold tenancies. It is a pretty sad comment that the Government's grasp of the subject is so poor that they do not have an analysis of the current position. Perhaps the Minister is able to give us figures, but a few weeks ago, one of his colleagues, in answer to me, was unable to do so.
The problem with these orders is that they are meanspirited measures that will penalise a number of private tenants, increase insecurity and anxiety, and fail abjectly in their supposed objective of creating new lettings. I hope that the House will reject these shabby and mean-spirited orders.

Mr. Peter Bruinvels: Speaking after the hon. Member for Fulham (Mr. Raynsford) is quite depressing, because of his jaundiced and snide remarks. These are good measures, and all the hon. Gentleman is seeking to do is deter potential landlords from offering shortholds. This scare and smear tactic is completely unacceptable to people who are desperately seeking accommodation in London and elsewhere and who have a real opportunity under these two measures, which are welcomed by those who want to work in London. The Labour party spends its whole time knocking the Government over the unemployment figures. My hon. Friend the Minister is making a positive contribution and Labour Members baulk at it.
The shortage of short-term rented accommodation is becoming almost a national crisis. Whether or not the problem is mainly in London, it has certainly affected the employment situation. We all know that shorthold has been possible since 28 November 1980, but because it has been so difficult to remove difficult tenants who do not pay their rent, many landlords have hesitated to put their houses out to rent.
It is a smear tactic to criticise the landlords. The majority of potential landlords are decent people. Some of them have large properties. As the hon. Member for Leeds, West (Mr. Meadowcroft) said in his excellent speech, there are housing problems. I do not think that I am risking anything by saying that, if the hon. Gentleman ever wishes to join the Conservatives, we would welcome him, especially in considering housing matters.
We certainly need more private sector rented accommodation. The orders will ensure that more properties become available. I shall continue to express concern at the lateness of repairs on properties sometimes, but, nevertheless, the measures are welcome. Years ago, private sector rented accommodation was a growth industry. Only abuses and the failure to repair property led to things going wrong. Because tenants had security of tenure, many potential landlords were deterred from lettng property.
The shorthold requirements, giving a fixed term tenancy, whether for one year or five years, will encourage many potential landlords to come forward. It is unfair for the hon. Member for Fulham to rubbish the tenant protections in the orders. It is clear to all Conservative members that any tenant on a shorthold tenancy will be


safe for the full period of the tenancy, provided that he does not break the conditions of the tenancy. That is a fair, just and equitable way of dealing with the housing shortage, especially in London.
The arrangements for shorthold tenancies make it possible, subject to the usual conditions, for the tenancy to be liable for renewal after the shorthold period ends. That is a good provision. Fair rents may still be registered for all shorthold property. I do not believe that the majority of landlords will abuse the system. Of course, I believe in a market economy. Rents obviously must be fair. I should think that the proposed fair rent charges will be agreed on both sides. A landlord will have the right to repossess at the end of the shorthold tenancy, and that must be welcome news. At least a future tenant will know that he can go to London or Leicester for a minimum of five years, provided he honours the conditions of the tenancy. That will mean labour mobility, which must mean good news for employers who want to take on extra staff and for potential landlords who can increase their reserves by letting out part of their property. It is a crying shame that many houses fall into disrepair because no extra funds are coming into the household. As my hon. Friend the Minister made clear, the ability of any tenant to claim housing benefit on higher rents will not be affected by these changes.
The orders are good news for the tenants who want to move to better jobs. They are good news for the employers. They will ensure that housing becomes available to all. They will ensure that the landlord and the tenant have rights. I hope that houses will be kept in good repair. On that basis, we should support the orders.

Mr. Geoffrey Lofthouse: I was interested to hear the hon. Member for Leicester, East (Mr. Bruinvels) say that the orders are good news for all. There are other places apart from London, and I think that the mining communities will not share his views. The authorities there did not wait for these two shabby orders before starting to implement Rachman tactics with former National Coal Board houses. The hon. Member for Bournemouth, West (Mr. Butterfill) said that he does not support the racketeers cashing in on short-term tenancies. I do not know whether the Minister, or indeed the House, knows what is happening at present. Coal Board estates, homes belonging to miners who have worked in the mining industry all their lives, are being flogged off at auctions, being put out to tender, and going for very low prices. Then, within days, some of the purchasers, who are not known to the tenants, are offering to flog them off to the tenants at prices far in excess of what they purchased them for, knowing full well that the tenants are not in a position to purchase them.

Mr. Butterfill: Is it not true, though, that the properties are offered first to the tenants before they are sold by public auction? They are only sold when the tenants decline to buy.

Mr. Lofthouse: It is true of some of the properties, but not all. The fact is that the tenants have not been able to purchase them. Some of them are elderly, retired miners who are unable to get mortgages.
Let me describe a classic case of a shorthold tenancy. I have in my possession a letter from a firm of solicitors to a couple residing just outside the borders of my constituency. It is to offer them a shorthold tenancy of a Coal Board house purchased only a few weeks previously and it says:
We act on behalf of the owners of the above property, your proposed Landlords, and are informed by their Managing Agents, Messrs,. Michael A. Wrest &amp; Co. of Cockerham Hall Mews, Huddersfield Road, Barnsley, that you have agreed to take a tenancy of the above property for a period of one year subject to Contract.
Nowhere does it say who the landlord is. It goes on to give the terms of the agreement, as follows:
The weekly rent is thirty-five pounds. The commencement date is 30th January 1987.
Many of these miners have, over the years, enjoyed low rents, in accordance with their agreements with the Coal Board. Apart from that, many of the sitting tenants have had a fair rent fixed for their properties. That is about £21 a week, including rates. This agreement is offering the property to these tenants at £35 a week plus general rate and water rate.
The letter goes on:
The agreement to be used is a 'Protected Shorthold Tenancy'. Under its terms your Landlord is committed to granting you a tenancy of the property for one year. At the end of the year it may be terminated by Landlord and possession of the property can be recovered. You can give one month's notice of termination at any time.
We have heard from Conservative Members, quite rightly, that there is a right to apply to have a fair rent fixed. In accordance with law that is right, but in practice these people who have a roof over their heads for the short period of 12 months will be frightened to death to go and ask for a fair rent to be fixed because they believe the landlord may then turn them out at the end of the 12 months. That is what will happen.
The letter continues:
Payments you must make.
This is over and above the £35 a week plus the general rate and water rate. It states:
When you sign the Tenancy Agreement you will have to make the following payments: four weeks rent in advance, £140: breakage deposit, £150; legal fees, £63·50. Total amount required, £353·50 .
In the area that I represent we call that key money, and if someone cannot pay it he does not get the key.

Mr. Peter Hardy: The sums to which my hon. Friend has referred are substantial, and perhaps more substantial to him than to Conservative Members. Will he estimate the price that the company paid for the houses and the profit that is being made?

Mr. Lofthouse: I do not have the exact figures, but the houses have been available in the area for £2,500 to £3,000. We are talking about landlords who are moving into these markets and recouping their money within two years. If that can be considered as fair within the context of shortterm tenancy agreements, what cannot? If that is the type of landlord that we are being asked to sustain, who else are we to support'? We have heard about Christian gentlemen who put their money into housing because they want to provide homes for others, and I do not deny that they are to be found, but there are landlords who take a different view.
There are areas where people are desperate for homes. Some of my constituents who are anxious for a tenancy have, through no fault of their own, never held a job since


they left school. They are desperate for a home and they will take almost anything that is available. If someone in that position is able to find £350 and he obtains a tenancy, he may qualify for a rent rebate, but that will mean that the state will be sustaining racketeer landlords who are charging excessive rents.

Mr. Rooker: If the local authority does not agree that the rent is fair, it is not required to meet all the costs of the rent in housing benefit.

Mr. Lofthouse: I appreciate that.
Unfortunately, there are those who take on the agreements that I have described who find that they cannot meet their commitments. When that happens, they are out on the street in two months' time in the lap of the social services department and the local authority.
So-called landlords—they are racketeers—have gone to auctions and purchased tenancies for knock-down prices in an attempt to cash in on the unfortunates who have no option but to accept their terms. If that is the case for short-term tenancies, I do not want it, and I do not think that many Conservative Members do. Youngsters who are desperate for homes are willing to put their signatures to the agreements that I have described because they have no option but to do so. They want somewhere to live. They want somewhere to take their babies or small children. They want to move away from their in-laws. They are desperate, and they are being forced into accepting the conditions of racketeers. If the orders are paving the way for the actions of these so-called landlords to be made legal, they should be slung out.

Mr. Mike Woodcock: I am not sure how the speech of the hon. Member for Pontefract and Castleford (Mr. Lofthouse) was related to the orders before the House.

Mr. Lofthouse: I was talking about short-term tenancies.

Mr. Woodcock: I understand the problems that the hon. Gentleman was discussing, but the orders bear no relation to those problems.
I welcome the improvements to the working of the Rent Act 1977, although they are fairly minor. If owners of properties have waited two years for a review of rent, why should they wait a further year to collect the rent that has been determined at today's values? Whatever the situation in the housing market there is no justice in that delay. Bringing London's protected shorthold tenancies into line with those in the rest of the country will increase the supply of housing accommodation in the capital.
Although I offer my hon. Friend the Minister mild congratulations on introducing these minor orders, I must remind him that since the Government have been in power the national stock of private rented accommodation has decreased by 25 per cent. from 2 million units to 1·5 million. At the same time, vast numbers of people desperately need to rent accommodation. They may need temporary accommodation. They may be moving between homes, the victims of broken homes, new households or many others.
Local authorities and housing associations cannot always meet those needs. There is no reason why they

should. The law should bring together people who need accommodation and those who are prepared to invest in housing. All to often it has kept the two groups apart.
Tonight's orders are sensible, but the Minister needs to go much further to rejuvenate the private rented sector. The Minister should also consider the basis on which rent officers determine fair rents. They may be called fair rents, but there they are not economic rents. If they were economic more people would be moving into the private sector rather than out of it.
It is in everyone's interests to have more investment in housing. I should like the Minister to introduce an order to allow a rent registration that is determined within a protected shorthold tenancy to die with that tenancy. The present rules prohibit that. An application for the registration of a fair rent cannot be made within two years. That has resulted in vast numbers of properties in London and elsewhere remaining empty until the end of two years. The Minister should consider applying that sensible reform on the cessation of any tenancy or in any circumstance where both landlord and tenant jointly apply for the cancellation of a registered rent. The present rules leave properties standing empty.
The Minister should also consider ending the provision whereby local authorities can apply for the registration of a fair rent even when both landlord and tenant do not wish that to happen. That provision is being used by some leftwing authorities to help to destroy what is left of the private rented sector.
The orders are sensible, but they are relatively minimal. I urge my hon. Friend to go further and allow the private rented sector to play as important a part in meeting housing needs as already happens in many countries in western Europe and the United States.

Mr. Jeremy Hanley: I apologise for my absence during the first few minutes of the debate, but I was in Manchester on parliamentary business until 7 o'clock. The fact that I was able to return especially for the debate is thanks to the efficiency of British Rail and my wife's excellent driving.

Mr. Meadowcroft: Is she a train driver?

Mr. Hanley: No, but I have no doubt that she would he as good at that as she is at driving a car.
I speak tonight with a heavy heart. My hon. Friend the Minister is one of the most sensitive Housing Ministers for many years. He has shown great sensitivity in dealing with the problems of the former and existing council estates in Castelnau in my constituency. In fact, his concentration on the particular problems of the Booth PRC estate there has won him many friends.
However, in exactly the same ward the private tenants—and there are many of them in my constituency— cause me great concern. They have missed out on the vast increase in house prices, which has been particularly exaggerated in my constituency. Many of them have fixed or very low incomes. Indeed, many of them have lost housing benefit.
The Minister has said on many occasions that we need another 1 million housing units, but on each occasion, and whenever he has mentioned reforms of the Rent Acts, he has said that existing tenants would be protected. I have passed on letters from him to my constituents when they


have been whipped up by scares from Labour or Liberal politicians claiming that the Rent Acts will cause great problems to private tenants.
However, one of the orders we are considering does affect existing tenants. I know that all rights cannot remain enshrined for all time, but in this matter many of my private tenants are gravely affected. Many have written to me, and one of them said:
In the last two rent reviews of my flat, the Richmond rent officer has leaned heavily on the side of the landlord, specifically to increase the landlord's return on investment. We have been told that this will continue until these rents equal those on the open, uncontrolled market … Furthermore, the rent officer's latest award to the landlord of our flat was a rent increase totalling 98 per cent. It would have created considerable hardship to have to pay this at once instead of in two phases. For those on fixed incomes—like a great many in the estate where I live—or those whose wages or salaries do not increase anything remotely approaching 98 per cent. over a two-year period, the hardship would be most severe.
That was one of 25 letters that I have received only this week.
During our conversations over the past two days, when I drew attention to this grave matter, the Minister said that he had not received anything like that sort of representation from any other part of the country. All that I can say is that the people in my constituency tend to be extremely well informed and well ahead of public opinion trends. I can assure the Minister that, after tonight, many more people will have heard of it.
Another constituent wrote saying:
The complex of flats in which I live—for 18 years—were relatively recently acquired by a company … Following an external face lift and decoration of the common parts my rent, from 28th May 1986, was increased from £1,340 to £2,740—a 103 per cent. increase … Complexes such as ours acquired by large, and often foreign, organisations, make a mockery of such a proposition.
Another wrote saying:
My husband and I are both pensioners and we have been private tenants here for the last 20 years.
That is not 20 years clocking up discounts to buy their own property; that is not 20 years clocking up the right to buy. They cannot move and take their rights with them. They have lived there for 20 years because they could not afford to live anywhere else. Even if they could have put themselves on to the council housing list, they were probably either too proud or too generous to this country to do so. One is 68 and the other 71, and in addition the wife has to have a part-time job to help pay the rent. They receive a rate rebate of £13 per fortnight, but, as the wife says:
The rents went up last year, so I managed to do another five hours a week to compensate, and the council immediately knocked at least a pound off the allowance. You see we are borderline cases— ex-service personnel (as if that meant a thing these days).
Yet another constituent wrote:
The elimination of the phased increases in Fair Rents over two years may well force many tenants to seek support or alternative accommodation from the Local Authorities, thus increasing the demands on rates and taxes. As a resident in a purpose built block of flats"—[Interruption.]
This is a very serious matter, and only Liberals would laugh at it. The letter continued:
I have to inform you that when the flats … become vacant they are not relet but sold to long leaseholders, thereby

giving the Landlord the opportunity to make a quick and exorbitant profit followed by equally exorbitant service charges.
Another constituent has written and this lady might be of interest to the Government. She writes:
Since your Government came into office you have already reduced the period of re-registration of rents from 3 years to two years.
I would like to point out, and there are many more people in a situation like myself, who have landlords whose only aim is money, money and more money, and who demand high rent increases at each re-registration, that if it were not for the protection of the Rent Officer, we would all be out on the streets without a home…I would also point out to you that where I live, the number of people voting Tory is very high indeed, but I for one will not be voting for you again and I have had others say this to me.
That constituent is a private secretary to a member of the Cabinet. She is changing her loyalties because she believes that she has been badly treated.
She continues:
I am told that Mr. Patten is proposing this 'in line with inflation which is now down to 3%'…Only last week we are told the Water Rate is going up by 5½%
—and, she says, that the Liberal council will increase her rates by 16 per cent.
Those increases will fall very hard on the private tenants and I suspect that none of them will have faced a rent increase of as little as the present rate of inflation.
I could quote from many other letters, but time precludes that. However, I shall mention one from an old-age pensioner, whose rent increased from £1,085 in February 1985 to £1,760. Thanks to the two-year phasing it went from £1,085, to £1,462 to £1,760.
I am afraid that it is no comfort to my constituents that that last bit of generosity to tenants will be taken away tonight. Why change that generosity and hurt many of those who have supported the Government in the past and who have also supported the nation fearlessly? Why do that just to support landlords, many of whom are corporations and many of whom are based abroad?
As I have said to my hon. Friend the Minister in conversations during the past few days, many people in my constituency are well-informed and they will make sacrifices to help the Government. That is the sort of person who has made sacrifices for us in the past, and if, by voting against this order tonight, I shall be sacrificing my future, I hope that that will be for the many who have, as I have said, sacrificed their past to help all of our futures.

Mr. John Fraser: At Question Time today we had an admission of the record number of those who were rendered homeless last year. The figure was over 100,000. If one considers the area of greatest housing stress, Greater London, one sees from the figures published only a few months ago by the Association of London Authorities that in the 16 stress Labour authorities in London the number of people in bed and breakfast accommodation was forecast to rise from about 6,600 in the first quarter of this year to about 12,000 in two year's time, in the first quarter of 1989. That is another sign of the growing and extraordinary crisis facing those who are less well-off in the capital city and elsewhere too.
The first question that one has to ask oneself is whether the two orders will make any contribution to solving the extraordinary housing crisis, especially in our urban conurbations. The answer must be that the orders will


make no contribution whatever in that direction. In fact, the order that deals with shorthold tenancies will contribute to the growing queue of homelessness in the same way as the statistics that were garnered by my hon. Friend the Member for Fulham (Mr. Raynsford) show the number of owner-occupiers who are now joining the homeless queue. Therefore, these orders will do nothing to address the major renting crisis.
It is argued that private landlords have a contribution to make towards providing housing, but no evidence has emerged from the debate that that is so. Generally speaking, private landlords fall into two categories. There are the private landlords who are not in the business for gain, of whom there are not many and often they are not competent to look after such a large capital asset as a home for someone else. I do not say that maliciously. The cause of much deterioration in our private housing is partly that rents are not sufficient to meet repair costs, and everybody recognises that.
The second type of private landlord may have the competence to look after one or two houses, but he has no interest in doing it. He is the commercial private landlord, who is simply in the business to extract as much gain as possible. Both parties have a great deal of experience, going back to the Rent Acts, but nothing that has happened in the past 30 years gives the slightest indication that relaxations or changes in rent control will contribute to additional private sector housing provision.
The right way to proceed is to encourage local authorities to build and rent—over the past eight years their programmes have been savaged — housing associations to build and rent, and responsible, licensed professional landlords to provide housing under assured tenancy schemes. A contribution to the condition of privately rented accommodation can be made by giving private tenants the right to buy in the same way as public sector tenants have that right.
The relief from phasing order has no effect on the supply of accommodation. We were given various figures about rent rises recorded by rent officers. The figures provided in parliamentary questions show a rent rise of about 9 per cent. per annum, which is more or less standard across the country. The evidence garnered by private tenants' organisations shows an average rent rise imposed by rent officers of about 17 per cent. The evidence that we have heard in a courageous speech from the hon. Member for Richmond and Barnes (Mr. Hanley) shows rent rises of up to 98 per cent. In my constituency there may be isolated examples of private tenants' rent increases of about 60 per cent. They are not unimportant to the tenants concerned.
All those rent rises seem to affect the group of people who fall outside the housing benefit safety net. They have probably saved or contributed towards an occupational pension, and they have the most to lose. They lost from the withdrawal of the electricity scheme introduced by the Labour Government and they are shattered to receive a rate rise of up to 70 per cent. They come to my advice bureau and say, "I do not know how I can continue the sort of life that I have led with this sort of rent rise."

Mr. Hanley: I am most grateful to the hon. Gentleman for allowing me to intervene and for his compliment. However, I am afraid that in one letter which time precluded me from reading out a constituent said that the real fear of removing the phasing of tenancies was caused

by the remote possibility of a Labour Government being elected and taking us back to the high levels of inflation that we experienced in the time scale that caused phasing originally. That, coupled with the inflation rates that we experienced during the Lib-Lab pact, is a serious fear for those people.

Mr. Fraser: The hon. Gentleman has partly lost the admiration that he earned for his courageous speech.
The order relating to ending the obligation to register a rent for protected shorthold tenancies will create the risk of a larger number of people eventually coming into the homeless queue. There is a gross abuse of Rent Act accommodation by private landlords throughout much of Greater London. Very few shorthold tenances are created, partly because there is the requirement to register the rent, and partly because the provisions about notice are regarded by most landlords as being difficult to comply with.
The central reason why private landlords do not go in for granting shorthold tenancies is that the attention of the tenant is drawn to the obligation to register the rent. Therefore, they engage in a whole series of other strategies to get high, uncontrolled rents. Sometimes they use the advice of the company let, and sometimes they trade on the ignorance of tenants who believe that furnished tenancies—they provide a minimum of furniture—are not subject to control. In many cases they do not rely upon any loophole in the law. They used to rely upon licences, but that has been brought to an end by the House of Lords case in Street and Montford. However, they have relied on the sheer ignorance of the tenants. Many landlords exploit the shortage of housing to rent in central London and demand very high rents from tenants.
After a time the tenants find that they are not able to keep up with the high rents. They often do not qualify for housing benefit at the full rate, and eventually they find that they are in debt and cannot keep up the payments. They have then to look to the private sector or the homeless queue for their next tranche of accommodation.
There is the risk that if tenants are properly advised they will go to the rent officer and get a registered rent. If they take legal advice from a law centre, or a solicitor, or whatever, they can establish a protected tenancy and the landlord is defeated. However, very few people do that. The removal of registration of rents from shorthold tenancies in central London will give those landlords a legal cover that was not previously available. They will have the advantage of the unregistered rent and the advantage of the absence of security of tenure. Therefore, although it will not add to the supply of accommodation, it will add to the supply of people going on to the homeless list. That is why I believe that the last order that I mentioned runs counter to any assistance that could be given to the relief of homelessness and the shortage of housing.
If the Government were serious about these matters, they would not dip their toes in the pool of decontrol. They would be addressing their minds much more seriously to the central problems of homelessness and the shortage of housing to rent in the capital.

Mr. John Patten: This has been an extremely interesting debate, almost without exception. There have been some thought-provoking contributions. I have been given pause


for thought by several things that have been said, and perhaps we will get a chance to air them in a debate in the not too distant future.
It was clear from the characteristically forceful and thoughtful contribution of the hon. Member for Birmingham, Perry Barr (Mr. Rooker) that he wants the Rent Act strengthened and that he wants to see the end of the private sector in Britain. Britain is currently losing 70,000 private rented tenancies a year. The sector is vanishing and it will be gone by the year 2000. That is what the Labour party and the hon. Member for Perry Barr want to see, but with some important exceptions, which he acknowledged and which I should like to reinforce.
The hon. Member once more asserted his support and the support of his party for shared ownership and assured tenancies. I welcome that. It is important that those messages continue to be given to the housing association movement and investing institutions that wish to become involved in those forms of tenure. He also gave a fairly unqualified welcome for the thought, under certain conditions, of building societies and pension funds investing in this sort of tenure. That is important. His hon. Friend the Member for Norwood (Mr. Fraser) talked about the need for licensed professional landlords. That is an area of agreement between the Labour party and the Conservative party upon which we can build in the future. I welcome that consensus, although we fundamentally disagree about the private rented sector as a whole.
The hon. Member for Perry Barr asked about the statistics of rent increases in recent years in the private rented sector. I think that he based his ideas mainly on the interesting brief circulated by Shelter on behalf of 10 local associations representing people in the private rented sector. In particular, the hon. Gentleman quoted a 17 per cent. rent rise in the first half of 1986. That statistic is based upon the kind of calculation that Ministers are normally accused of trying to get away with. That figure actually relates to rent for the previous two years. The rents were really rising at the rate of 8 . 5 per cent. a year. Sometimes the Government are criticised for misusing statistics. I shall have to speak to my friend Sheila Mckechnie the next time I meet her and ensure that in future we have a common understanding about the basis of statistics, such as that quoted by the hon. Member for Perry Barr.
The most important point is that private rents rose by 340 per cent. between 1970 and 1986. That must be compared to the rise in the retail prices index during the same period of 417 per cent. Local authority rents increased by more during that time, by 581 per cent., and average earnings increased by 579 per cent. That is the true picture over 16 years, and that shows the true scale of the rise in private rents. That rise is set in context when those figures are considered together.
It is also very important to recognise that the average unfurnished weekly tenancy in England and Wales is let at £19·63and the average for a furnished let is £28. The figures for London are £24·92 and £35·94 respectively. Some of the figures—

Mr. Lofthouse: rose—

Mr. Patten: I shall consider the points made by the hon. Member for Pontefract and Castleford (Mr. Lofthouse) in a moment. He raised some very important and disturbing points, which I shall try to address shortly.
The hon. Member for Perry Barr asked how many people in private rented tenancies enjoyed housing benefit. The exact number is 626,000. That is nearly one third of all private sector tenants. The hon. Gentleman and the hon. Member for Fulham (Mr. Raynsford) are correct, in that we do not have up-to-date figures of the number of shortholds. We have the figures relating to 1981, when shorthold records were kept in the fair rent registrations for the country, and there were about 5,000 such tenancies then. We have not kept the figures since then, although the Office of Population Censuses and Surveys in its examination of new lettings for the Department in 1986, showed that shorthold is a widely understood and appreciated form of tenure in the country outside London.
The hon. Member for Pontefract and Castleford caused me considerable concern. I know that in recent weeks there have been discussions with British Coal about the sale and disposal of ex-Coal Board houses. I understand that under the new approach auction will be a matter only of last resort, and that will be welcomed.
The hon. Member for Pontefract and Castleford produced some disturbing pieces of evidence in the letter that he read out. I would be extremely grateful if the hon. Gentleman would pass that correspondence to me, in the same way as his hon. Friend the Member for Barnsley, West and Penistone (Mr. McKay) has passed me correspondence across the Dispatch Box, so that I can examine that information and reply as soon as possible.
The contribution on these matters from the Liberal Benches came from the hon. Member for Leeds, West (Mr. Meadowcroft), and I congratulate the hon. Gentleman on his new role as the housing spokesman for the alliance. He made a remarkable contribution, which was widely appreciated on the Conservative Benches, although having made his remarkable contribution he finished by saying that he would vote against the two orders. None the less, the first seven eighths of the hon. Gentleman's speech was splendid stuff and we were about to offer him a job on the basis of his comments.
The hon. Gentleman shot holes through the Labour Front Bench argument about the immorality of making profits from renting. Any of my hon. Friends who were not in the Chamber when he made his speech should look in tomorrow's Hansard at his argument. What he said is important, because we want respectable and responsible landlordism, as much in the public and in the private sector. Again, there is a wide agreement across the Chamber that that is what we want to see.
Just as it is important that we welcome the limited concessions from the Labour party about shared tenancies and shared ownership, and the possibility of building society and pension fund investment in the private rented sector, so I welcome what seemed to be implicit in the hon. Gentleman's speech—that it is not alliance policy to be completely against the private sector, and in certain circumstances the alliance would be prepared to look again at this. I am not seeking to get the hon. Gentleman into a corner and make pledges that we can use in the general election. If he is called in the debate on Tuesday, he can make his views known then. However, he has made the important statement that the alliance is not against the private rented sector.
Some important messages are going out from the speeches made by the hon. Members for Perry Barr and for Leeds, West to investing institutions, such as the pension funds and the building societies, which are queueing up to invest in rented housing as responsible landlords. We all wish to see that.
It was marvellous to hear the critical analysis of my hon. Friend the Member for Hampstead and Highgate (Sir G. Finsberg) of the two orders. He was right about the importance of phasing. I was interested to hear his remarks about shortholds, because he was one of the architects of the shorthold idea in the early 1980s. He asked me specifically whether new forms on shortholds will say that it will be open to the tenant or the landlord to get a fair rent registered. The answer to that is a clear and unequivocal yes, and I hope that he will forgive me if I write to him soon about the detailed point raised by his friends about housing associations.

Sir Geoffrey Finsberg: My non-friends.

Mr. Patten: I apologise— my hon. Friend's non-friends.
My hon. Friends the Members for Bournemouth, West (Mr. Butterfill) for Leicester, East (Mr. Bruinvels) and for Ellesmere Port and Neston (Mr. Woodcock) all made substantial contributions. They recognised that if we can find ways of getting some consensus between the parties about some parts of private renting, it will be possible to house the homeless, those seeking jobs in new areas, and young people at the end of housing queues. We need greater investment in housing and more diversity of sources into different forms of tenure. I welcome that.
My hon. Friend the Member for Richmond and Barnes (Mr. Hanley) made a thoughtful and brave speech in the interests of his constituents. 1 regret that he has decided that he will vote against us. Perhaps in the last two minutes he will reconsider his position. I have sympathy with his views and with the position of the tenants concerned. However, the case in question is not typical, and the rent increases that he quoted at least in part reflect substantial expenditure on the properties to which he referred. The average rent of an unfurnished property in London is £25 a week. Increases above the rate of inflation are often the direct consequence of rent control. Rent rises were held down in the 1970s, with the result that a catching-up period was, alas, inevitable.
I hope that the House recognises the case for making these orders. They will encourage the provision of more homes for rent in our capital and in Britain as a whole. I think that they will also help to fill some empty homes. That is our main consideration, and I ask the House to support these modest but worthwhile measures.

Question put:—

The House divided: Ayes 155, Noes 92.

Division No. 81]
[11.30 pm


AYES


Baldry, Tony
Durant, Tony


Bevan, David Gilroy
Finsberg, Sir Geoffrey


Boscawen, Hon Robert
Forsyth, Michael (Stirling)


Brandon-Bravo, Martin
Forth, Eric


Bruinvels, Peter
Franks, Cecil


Bulmer. Esmond
Fraser, Peter (Angus East)


Burt, Alistair
Freeman, Roger


Butterfill, John
Galley, Roy


Cockeram, Eric
Garel-Jones, Tristan


Colvin, Michael
Gow, Ian


Cope, John
Gregory, Conal





Griffiths, Sir Eldon
Page, Sir John (Harrow W)


Griffiths, Peter (Portsm'th N)
Page, Richard (Herts SW)


Ground, Patrick
Patten, J. (Oxf W &amp; Abgdn)


Gummer, Rt Hon John S
Pawsey, James


Hamilton, Hon A. (Epsom)
Pollock, Alexander


Hamilton, Neil (Tatton)
Powell, William (Corby)


Hannam, John
Powley, John


Hargreaves, Kenneth
Proctor, K. Harvey


Harris, David
Raffan, Keith


Harvey, Robert
Rathbone, Tim


Hawkins, Sir Paul (N'folk SW)
Rhodes James, Robert


Hayes, J.
Rhys Williams, Sir Brandon


Heddle, John
Ridley, Rt Hon Nicholas


Hind, Kenneth
Roberts, Wyn (Conwy)


Hirst, Michael
Robinson, Mark (N'port W)


Hogg, Hon Douglas (Gr'th'm)
Roe, Mrs Marion


Holland, Sir Philip (Gedling)
Rowe, Andrew


Holt, Richard
Sackville, Hon Thomas


Howarth, Alan (Stratf'd-on-A)
Sainsbury, Hon Timothy


Howarth, Gerald (Cannock)
Sayeed, Jonathan


Hubbard-Miles, Peter
Shaw, Sir Michael (Scarb)


Jackson, Robert
Shelton, William (Streatham)


Jenkin, Rt Hon Patrick
Silvester, Fred


Johnson Smith, Sir Geoffrey
:Sims, Roger


Jones, Gwilym (Cardiff N)
Skeet, Sir Trevor


Jones, Robert (Herts W)
Smith, Tim (Beaconsfield)


Key, Robert
Soames, Hon Nicholas


King, Roger (B'ham N'field)
Speller, Tony


Knight, Greg (Derby N)
Spencer, Derek


Knight, Dame Jill (Edgbaston)
Spicer, Jim (Dorset W)


Knowles, Michael
Spicer, Michael (S Worcs)


Lang, Ian
Stanbrook, Ivor


Latham, Michael
Steen, Anthony


Lawler, Geoffrey
Stern, Michael


Lee, John (Pendle)
Stevens, Lewis (Nuneaton)


Leigh, Edward (Gainsbor'gh)
Stewart, Allan (Eastwood)


Lennox-Boyd, Hon Mark
Stewart, Andrew (Sherwood)


Lightbown, David
Stradling Thomas, Sir John


Lloyd, Peter (Fareham)
Taylor, John (Solihull)


Lord, Michael
Temple-Morris, Peter


Luce, Rt Hon Richard
Terlezki, Stefan


Lyell, Nicholas
Thomas, Rt Hon Peter


MacGregor, Rt Hon John
Thompson, Donald (Calder V)


MacKay, John (Argyll &amp; Bute)
Thompson, Patrick (N'ich N)


Maclean, David John
Thurnham, Peter


McLoughlin, Patrick
Townend, John (Bridlington)


McNair-Wilson, M. (N'bury)
Trotter, Neville


Major, John
Twinn, Dr Ian


Malone, Gerald
Waddington, Rt Hon David


Marland, Paul
Wakeham, Rt Hon John


Mather, Sir Carol
Walden, George


Maude, Hon Francis
Waller, Gary


Maxwell-Hyslop, Robin
Ward, John


Mayhew, Sir Patrick
Wardle, C. (Bexhill)


Merchant, Piers
Warren, Kenneth


Meyer, Sir Anthony
Watts, John


Miller, Hal (B'grove)
Wells, Sir John (Maidstone)


Mills, Iain (Meriden)
Wheeler, John


Moate, Roger
Whitfield, John


Morris, M. (N'hampton S)
Wilkinson, John


Morrison, Hon P. (Chester)
Winterton, Mrs Ann


Nelson, Anthony
Winterton, Nicholas


Neubert, Michael
Wood, Timothy


Newton, Tony
Woodcock, Michael


Nicholls, Patrick



Norris, Steven
Tellers for the Ayes:


Onslow, Cranley
Mr. Richard Ryder and


Oppenheim, Phillip
Mr. Michael Portillo.


Osborn, Sir John





NOES


Adams, Allen (Paisley N)
Brown, N. (N'c'tle-u-Tyne E)


Alton, David
Caborn, Richard


Beith, A. J.
Carlile, Alexander (Montg'y)


Benn, Rt Hon Tony
Clark, Dr David (S Shields)


Bermingham, Gerald
Clarke, Thomas


Boyes, Roland
Clay, Robert


Bray, Dr Jeremy
Clwyd, Mrs Ann


Brown, Gordon (D'f'mline E)
Cocks, Rt Hon M. (Bristol S)


Brown, Hugh D. (Proven)
Cook, Frank (Stockton North)






Cook, Robin F. (Livingston)
McKay, Allen (Penistone)


Cunliffe, Lawrence
McWilliam, John


Cunningham, Dr John
Madden, Max


Dalyell, Tam
Marek, Dr John


Davies, Ronald (Caerphilly)
Martin, Michael


Deakins, Eric
Maxton, John


Dixon, Donald
Meadowcroft, Michael


Dormand, Jack
Michie, William


Dubs, Alfred
Milian, Rt Hon Bruce


Duffy, A. E. P.
Morris, Rt Hon J. (Aberavon)


Eadie, Alex
Nellist, David


Evans, John (St. Helens N)
O'Neill, Martin


Fatchett, Derek
Parry, Robert


Faulds, Andrew
Patchett, Terry


Fields, T. (L'pool Broad Gn)
Pendry, Tom


Foster, Derek
Pike, Peter


Fraser, J. (Norwood)
Powell, Raymond (Ogmore)


Freud, Clement
Prescott, John


George, Bruce
Raynsford, Nick


Golding, Mrs Llin
Redmond, Martin


Hamilton, James (M'well N)
Robinson, G. (Coventry NW)


Hanley, Jeremy
Rogers, Allan


Hardy, Peter
Rooker, J. W.


Hogg, N. (C'nauld &amp; Kilsyth)
Ross, Ernest (Dundee W)


Howarth, George (Knowsley, N)
Rowlands, Ted


Howells, Geraint
Shore, Rt Hon Peter


Hoyle, Douglas
Skinner, Dennis


Hughes, Robert (Aberdeen N)
Soley, Clive


Hughes, Sean (Knowsley S)
Spearing, Nigel


Hughes, Simon (Southwark)
Steel, Rt Hon David


Jones, Barry (Alyn &amp; Deeside)
Strang, Gavin


Kirkwood, Archy
Wallace, James


Lamond, James
Wardell, Gareth (Gower)


Leighton, Ronald
Welsh, Michael


Livsey, Richard
Winnick, David


Lloyd. Tony (Stretford)



Lofthouse, Geoffrey
Tellers for the Noes:


Loyden, Edward
Mr. Frank Haynes and


McDonald, Dr Oonagh
Mr. Chris Smith.

Question accordingly agreed to.

Resolved,
That the draft Rent (Relief from Phasing) Order 1987, which was laid before this House on 13th January, be approved.

SHORTHOLD TENANCIES (RENT REGISTRATION)

Resolved,
That the draft Protected Shorthold Tenancies (Rent Registration) Order 1987, which was laid before this House on 13th January, be approved.—[Mr. John Patten.]

Orders of the Day — Seasonal Workers (Definition)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]

Mr. Allan Rogers: This issue has been in front of me and the Minister for at least a year. On 17 January 1986 I wrote to the Minister about one of my constituents who had been told that he could not receive benefit when he went to sign on for unemployment benefit because he was deemed to be a seasonal worker. When he came to see me, he told me of the derisory amount of supplementary benefit that had been offered to him because he was not entitled to unemployment benefit. He also told me that unemployed people in the Rhondda were being classified as seasonal workers. I did not understand what he told me then, but in the last year I have become an expert on seasonal workers, if only to rebut the lengthy answers that I have received from various Departments.
I took up this matter initially with the Department of Employment and asked why my constituent had been classified as a seasonal worker. In his reply the Under- Secretary of State at that time referred to the regulations covering seasonal workers and then tried to explain why somebody who lives in what was probably the most industrialised constituency in Great Britain should be so classified. My constituent had been able to work only for periods during the three previous years, and he was deemed to have established a pattern of work that meant that he was caught by this legislation.
The National Insurance Advisory Committee, which reported in accordance with section 138 of the Social Security Act 1975, refers to this problem. The committee concluded that in 1952 the regulations were in general working satisfactorily, although it had reservations about some of the case law. It recommended
that the definitions should be redrafted to make it clear that the application of the regulations should not be restricted to periods comparable with the annual seasons (spring, summer, autumn and winter) and that, to avoid the pattern being confused by the effects of industrial recessions, the definition of seasonal worker should be limited so that it applied only to employment which was seasonal in consequence of factors inherent in the nature or conditions of the industry concerned.
The report states that it must be a seasonal industry for people to be called seasonal workers. That is why it is odd that we have people called seasonal workers, although they are working in normal industrial activity. The report states that industrial recession limited the opportunities of employment at times when people were not employed. One of the conditions currently extant for people qualifying for benefit is that they must reasonably pursue employment during the periods when they are not engaged in the so-called seasonal activity.
I pointed out in my correspondence with the Minister that those conditions would be acceptable if alternative employment was available. In an area such as Rhondda, where there is over 30 per cent. male unemployment, people leave the register— indeed, they have been exhorted to do so—and obtain jobs. However, if they do so they fall into the trap of being deemed seasonal workers if they do that work for three years. That makes nonsense of the Department of Employment "availability for work" questionnaire, which is supposed to be a scientific measurement of the number of people who want to work.
My constituents are laid off, so they go to the Department of Employment and fill in the questionnaire to say that they are ready to work, and then they are classified as seasonal workers because they have worked only when there has been a slight upturn in the economy.
At a time of recession or low industrial and economic activity, any fluctuations in the economy are local and seasonal. One example—which does not apply to my constituency— is the fact that the Central Electricity Generating Board is contracting out maintenance on its power stations. That can be done only on a seasonal basis—when there is not much demand for electricity supply. The CEGB will shut down the power stations for maintenance work. If that happens over a three-year period and that is the only time that people can get jobs, because it is the only time the CEGB shuts down, they are classified as seasonal workers. That is why I was concerned about the issue.
I sought the debate almost out of frustration. My last letter to the Department was written on 12 November. Last Thursday, I was successful in obtaining this Adjournment debate and, out of the blue, on Tuesday 3 February I received an answer from the Minister apologising for the delay in answering my letter of 12 November. People might say that Adjournment debates are not useful. This debate has been useful, because it prompted a reply from the Minister after a three-month delay. In his letter, the Minister says:
You will be interested to learn therefore that we have recently referred the question of the seasonal workers' regulations to the Social Security Advisory Committee.
I was annoyed, because for a year I was in continual and active correspondence with the Department, and on 20 November— whether it was due to my pressure or other people's pressure, or perhaps I made the Department rethink the issue—the Department referred the matter to the Social Security Advisory Committee without the decency of letting me know that that had been done. If I had not applied for this Adjournment debate and the matter had not been raised tonight, I would not have received this information.
The deadline for submissions to the SSAC is 12 February. I received the information only this week. I am worried because trade unions, organisations and individuals who might want to submit evidence will not be able to do so. I hope that the Under-Secretary of State will extend the deadline.
In 1977, the last time the advisory committee sat, it received seven representations—five from employers and organisations connected with the fish and fish-processing industry, one from the TUC and one from one of its affiliated organisations. The problem has increased enormously since 1977. But if the dissemination of information and the demand for representations were the same then as they are now, it is no wonder that the advisory committee does not receive representations.
This important issue should be thoroughly aired and considered in the present context. Over the past year, I have said continually in my correspondence that the definitions in the social security regulations are valid only in the context in which they operate. Whereas they might well have been valid in the 1930s, 1940s or 1950s, and certainly in the 1970s, they are not valid today because the context of employment has changed. Unemployment is no longer running at 3 per cent. or 4 per cent.; it is much higher.
To show how the context changes, I shall refer to the principal classes of claimants in 1935. In 1935, they included people who worked in holiday resorts— waitresses, servants in boarding houses and hotels, drivers and conductors, shop assistants, amusement and entertainment workers, pier, beach and swimming attendants, yacht hands and seamen on pleasure boats. In other localities, they included fishermen, fish workers, ice cream makers and vendors, bookmakers' clerks—I do not know why that last job is seasonal but I suppose that it is because there is a flat season and a season over the sticks—maltsters, brickyard workers, beet sugar workers and professional footballers. I mention the last group in particular to demonstrate how the context has changed. When the regulations were designed, some professional workers were classified as seasonal workers.
Time has moved on. My time to speak is rapidly running out. I have achieved a small success in getting the Minister to look at the regulations again. I am pleased that he will do so. I hope that he will accept in good spirit my criticism of the delays in replying to my letter and of the fact that I did not receive any notice that the matter would be referred to the Social Security Advisory Committee. I hope that the Minister will extend the deadline for the receipt of representations.

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Nicholas Lyell): I am grateful to the hon. Member for Rhondda (Mr. Rogers) for raising this topic, which is pertinent, and for explaining his concern about his constituents and about the possible position of other people who face the same problem.
The hon. Gentleman drew attention to some problems that have attended the operation of the rules about seasonal workers since their inception as long ago as the days, not of recent recessions, but of the recession which preceded the second world war.
I am aware that the hon. Gentleman has written on a number of occasions about the problem affecting his own constituent, and the particular case to which he has referred has been considered, as he knows, by the appeal authorities on two occasions, the latest being a hearing by the social security commissioner on 26 January 1987, whose decision is still awaited. In view of the independent. role of these statutory authorities, it would not be appropriate for me to comment on the substance of the particular case.
I appreciate the genuine concern that the hon. Member has shown and I can best reply to the points he has made by explaining the real dilemma that the administration of these rules has presented not only to the present Government but to many Governments in the past.
Let me first explain briefly who is treated as a seasonal worker in the unemployment benefit system. The regulations say that a seasonal worker is
a person whose normal employment is for part or parts only of a year in an occupation or occupations of which the availability or extent varies at approximately the same time or times in successive years; or any other person who normally restricts his employment to the same, or substantially the same, part or parts only of the year.
A person is treated as a seasonal worker only after three years in such work. I shall return to that point later. I should make it plain that a seasonal worker is not


automatically disentitled to benefit during his off season but has to satisfy an additional condition to qualify. Again, I shall return to that later.
Long before the Beveridge report, it was recognised that without special rules seasonal workers would be in a position to take advantage of an unemployment insurance system by claiming benefit payments for several months each year, year in and year out. This poses two problems. The first is cost, the burden of which would fall on other contributors. The second is a problem of principle. A person should not be able to receive unemployment benefit for days or periods on which he would not normally work, so effectively subsidising his income by means of a non-means-tested benefit.
It was to solve these problems that restrictions on the payment of unemployment benefit to seasonal workers were introduced as early as 1931 following the first report of the Royal Commission on unemployment insurance. In 1946—and the hon. Gentleman has rightly traced some of the history—a report of the then National Insurance Advisory Committee on benefit entitlement for these workers confirmed the need for additional conditions to be applied to seasonal workers. More recently, in 1977, a second report by the National Insurance Advisory Committee concluded that additional conditions continued to be necessary.
Unemployment benefit is not a means-tested benefit. it is available to all unemployed persons who satisfy the contribution conditions and are available for employment, unless specific rules exclude them. It is possible for persons receiving this daily benefit to be in employment on some days and unemployed on others. There are therefore a number of rules whose broad purpose is to ensure that this benefit does not become a non-means-tested supplement to normal income, perhaps as a consequence removing the incentive to enter more fully into the employment field. I fully recognise that one of the points that the hon. Gentleman is making is that that particular aspect does not apply in cases such as that of his constituent. Examples of these rules are those which prevent payment of benefit to persons who do not normally work on Saturdays or who customarily work for fewer than six days per week. The rules affecting seasonal workers are designed to achieve this same end but operate over a longer time scale. It would be inconsistent for persons who normally work for part of the week to be denied benefit while it was paid to those who normally work for only part of the year.
National Insurance contributions are intended to insure workers against the risk of unemployment, but it would amount to insurance against a virtual certainty if benefit were paid automatically to people whose work regularly involved spells of unemployment at or about the same time each year. The payment of unemployment benefit for regular periods each year without restriction to persons who have adopted a seasonal pattern of work would be unfair to the general body of contributors. This is because the payment of unemployment benefit in the normal course is limited to a total of 312 days in any single period. A seasonal worker would never exhaust his entitlement; it would be renewed after each season. It is not surprising therefore that advisory committees over the years— indeed, over the decades— have accepted the necessity for special rules to apply to seasonal workers.
I come to the matter of safeguards. The present legislation provides a number of safeguards to ensure as far as possible that persons are not unfairly treated as seasonal workers. The additional condition is not applied until a person has become a seasonal worker as defined in the regulations. By virtue of case law he is not treated as a seasonal worker until he has completed a three-year pattern of seasonal employment. It is of course possible for a person apparently to acquire a seasonal pattern of employment in any one year, but it would be unlikely that the same set of circumstances would operate fortuitously again during the following year. It would be most improbable that a similar pattern of seasonal work had operated for three years when that person was not truly a seasonal worker. It is that position that the hon. Gentleman asks to be reconsidered, and I understand his argument. As a further safeguard, all periods of less than seven consecutive days unemployment are ignored for the purpose of establishing the off season period, and unless the aggregate off season is greater than seven weeks the additional condition does not apply.
As I have mentioned, all claims to benefit from a person regarded as a seasonal worker are subject to an additional condition. In simple terms, benefit is not payable for any day in the off season unless the claimant has had, or can reasonably expect to obtain, a substantial amount of employment in the off season. That may be highly pertinent. The term "substantial amount of employment" generally means at least a quarter of the off season. A seasonal worker who has the misfortune to become unemployed during his on season is not required to satisfy an additional condition and is free to claim benefit in the usual way.
Now the pros of seasonal working. There are many circumstances in which the advantages that seasonal employment offers far outweigh any considerations of benefit entitlement for the off season. It can provide work during convenient periods of the year or hours of work that are particularly suited, for example, to individual commitments to families, hobbies and study; and it can sometimes be lucrative work so that the season can provide a good living for the whole year. There are people who choose, and have always chosen, seasonal work for those and all kinds of reasons. I think that there can be no argument that benefit should not be paid for the off season in these circumstances. The additional condition is not a disincentive for these people, but it prevents abuse of the system. In most cases earnings over the season, if supplemented by income-related benefits, exceed an income from benefits alone.
Now the cons of seasonal working. I recognise, of course, that there is another side to this coin, as has been so clearly explained by the hon. Gentleman. In some places seasonal employment may be the only work that is available locally. People genuinely seeking permanent employment may have little option but to accept seasonal employment for the period that it is available. The hon. Gentleman argues that that is not what would normally be thought of as seasonal employment of the sort that applies in the case which he has raised. I have no doubt that it is a matter that is under consideration in the case that is before the commissioner, and one that will be considered by the advisory committee.
After a few years these people are regarded as seasonal workers, and they may well experience a sense of injustice when the seasonal worker rules are applied to their claim


to benefit. This sense of injustice, although understandable, is rarely related to hardship. I wish to reassure the hon. Gentleman that the seasonal worker rules are applicable only to claims for unemployment benefit. It is, as I know he recognises, open to any person affected by these rules to make a claim for supplementary benefit in the normal way, but he has pointed out that in the case of the constituent on whose behalf he has raised this debate that is not an adequate recompense.
There arc rules in the supplementary benefit system whereby substantial net earnings in the season—at least two and a half times the benefit requirements of the claimant and his dependents— may reduce and even extinguish this benefit in the off season. There is no rule such as applies to unemployment benefit to prevent payment of benefit altogether.
The dilemma which has faced successive Governments over the years is how to distinguish between those persons who have every intention of accepting work when the opportunity arises and those who are quite content and indeed choose to work for certain times of the year at their own convenience. The essential difference is in the intention of the individual, but benefit staff cannot be mind readers. It is desirable that there should be objective rules. Our intention is that those rules should work fairly. It has often been said that the acid test of an employment intention is the offer of a job. In areas where jobs are readily available such a test would be easy to apply. However, this approach is unlikely to be seen as satisfactory in a national context. Even in times of generally plentiful employment there are areas where jobs are harder to obtain than others and this always applied particularly in many areas where there is seasonal work. consequently, this test is not one which is easy to apply on a uniform basis and is not perhaps a solution to the problem.
Following representations made last year, including those of the hon. Gentleman and others, but especially in the light of debate in Committee on what became the Social Security Act 1986, my right hon. Friend the Secretary of State decided to refer the question of the operation of the additional condition applying to seasonal workers to the Social Security Advisory Committee. In particular, the committee was invited to consider those conditions in the light of labour market changes during the past 10 years. I am sure that the hon. Gentleman welcomes that.
In November the committee publicly invited comments and representations and said that it would accept these up to 12 February 1987. I appreciate the hon. Gentleman's point about shortage of time and I apologise to him for the fact that his letter was not given an earlier reply and that that reply, although in the pipeline, was immediately stimulated by the Adjournment debate.
The hon. Gentleman may wish to approach the Committee, but I undertake to send the committee a copy of the report of the debate and I will specifially draw its attention to the desirability of extending the time in which representations can be made. However, that will he a matter for the committee to decide. When the committee's report is received, I will carefully consider any recommendations to improve the working of the rules. Clearly, at this stage I cannot anticipate or make commitments on the outcome of that consideration.
The case that the hon. Gentleman has raised has brought the matter to the notice of the House and I assure him that it will be considered most carefully.

Question put and agreed to.

Adjourned accordingly at six minutes past Twelve o'clock.